Real interest rates: financial analyst's method)
The CFO of our firm has inquired you for an approximate answer to this question: What was the real purchasing power related with the three month Treasury bills and 30 year Treasury bonds? Presume the current interest rate on the three month Treasury bill is 4.34%, the 30 year Treasury bond is 7.33% as well as the inflation rate is 2.78%. As well the chief financial officer wants a short explanation must the three month real rate turn out to be less than the 30 year real rate?