Using the approximate Fisher equation, and stating your answer to 2 decimal places, state the real...

Using the approximate Fisher equation, and stating your answer to 2 decimal places, state the real rate of return when the nominal, risk-free rate is 6.50% and expected inflation is 3.75%.

Expert Solution

approximate fisher equation

nominal interest rate = real interest rate + inflation rate

=>

real rate of return = 6.5% - 3.75%

= 2.75%

jeff jeffy answered 2 years ago

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