Suppose 1-year t-bills currently yield 700 and the future, Ask an Expert

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Suppose 1-year T-bills currently yield 7.00% and the future inflation rate is expected to be constant at 3.20% per year. What is the real risk-free rate of return, r*? The cross-product term should be considered, i.e., if averaging is required, use the geometric average.

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Financial Management, Finance

Category:- Financial Management
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