Question
In: Finance
If the nominal rate of interest is 13.02% and the real rate of interest is 8.01%, what is the expected rate of inflation?
If the nominal rate of interest is 13.02% and the real rate of interest is 8.01%, what is the expected rate of inflation?
Solutions
Expert Solution
Based on Fischer Relation,
(1 + Nominal rate) = (1 + Real Rate) * (1 + Inflation)
(1 + 13.02%) = (1 + 8.01%) * (1 + Inflation)
1 + Inflation = 1.1302/1.0801
1 + Inflation = 1.0464
Inflation = 0.0464 = 4.64%
jeff jeffy answered 1 year agoRelated Solutions
The nominal rate of interest is 7% and the real rate of interest is 3%. What is the expected inflation rate?
The nominal rate of interest is 7% and the real rate of
interest is 3%. What is the expected inflation rate?
If the nominal interest rate is 3.25% and expected inflation is 2%, what is the real...
If the nominal interest rate is 3.25% and expected inflation is
2%, what is the real interest rate? Calculate it using the Fisher
Effect and the shortened equation.
What happens to expected inflation, nominal interest rate and real money demand when there is a...
What happens to expected inflation, nominal interest rate and
real money demand when there is a permanent decrease in money
supply growth?
If the nominal interest rate is 0.09 and the (expected) inflation rate is 0.03, what is...
If the nominal interest rate is 0.09 and the (expected)
inflation rate is 0.03, what is the real interest rate? (Answer as
a decimal.)
Consider an economy with only one good: corn. In 2010 the price
of corn was 6.08 and in 2011 the price was 7.9. What was the
inflation rate? (Answer as a decimal. Round to three decimal
places.)
Let NGDP be 1,825 and the money supply be 474. What is velocity?
(Round to one decimal place.)
If the nominal interest rate is 0.09 and the (expected) inflation rate is 0.03, what is...
If the nominal interest rate is 0.09 and the (expected)
inflation rate is 0.03, what is the real interest rate? (Answer as
a decimal.)
Consider an economy with only one good: corn. In 2010 the price
of corn was 6.08 and in 2011 the price was 7.9. What was the
inflation rate? (Answer as a decimal. Round to three decimal
places.)
Let NGDP be 1,825 and the money supply be 474. What is velocity?
(Round to one decimal place.)
If the real rate of interest is 2.1% and the expected inflation rate is 3.4%, then...
If the real rate of interest is 2.1% and the expected
inflation rate is 3.4%, then what would be nominal interest
rate?
Select one:
a. 5%
b. 6%
c. 5.57%
Could you explain the relationship between the real interest rate, nominal interest rate, and inflation rate?...
Could you explain the relationship between the real interest
rate, nominal interest rate, and inflation rate? How can we get the
approximate value of the real interest rate (show the formula)?
Could you also give me a real-life example to show this
relationship?
Subject: Finance
Could you explain the relationship among the real interest rate, nominal interest rate, and inflation rate?...
Could you explain the relationship among the real interest rate,
nominal interest rate, and inflation rate? How can we get the
approximate value of the real interest rate (show the formula)?
Could you also give me a real-life example to show this
relationship? (For example, recall the one I showed you about
buying apples).
a) What is realized real interest rate? Can a change in expected inflation rate affect the...
a) What is realized real interest rate? Can a change in
expected inflation rate affect the realized real interest rate?
Explain.
Given the nominal interest rate of 14% and the expected inflation of 11%, then the value...
Given the nominal interest rate of
14%
and the expected inflation of
11%,
then the value of the real interest rate is
nothing%.
With the real interest rate equal to
6%
and the expected inflation equal to
3%,
then the value of the nominal interest rate is
nothing%.
A lender prefers a
▼
higher
lower
real interest rate while a borrower prefers a
▼
lower
higher
real interest rate.
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Aquella Company produces towels for hotels. The following standards to produce a large towel have been...
- Rahul Dixit is working with Dhanraj Enterprises as Manager since the past 2 years. Rahul reports...
- A student is eligible to apply for graduation in a semester if the student has completed...
- For this discussion, visit the website of an employer in your field ( IT field )....
- During the power stroke of an internal combustion engine, the air-fuel mixture is ignited and the...
- US History Freedom House was an organization that: a demanded American intervention in the European war....
- 1A. Which of the following is not a type of financial cash flows? Interest expenses on...
ADVERTISEMENT