Assume that the consensus required rate of return on common stocks is 13 percent. In addition, you read in Fortune that the expected rate of inflation is 6 percent and the estimated long-term real growth rate of the economy is 3 percent. What interest rate would you expect on U.S. government T-bills? Round your answer to two decimal places.
Assume that the consensus required rate of return on common stocks is 13 percent. In addition, you read in Fortune that the expected rate of inflation is 6 percent and the estimated long-term real growth rate of the economy is 3 percent. What interest rate would you expect on U.S. government T-bills? Round your answer to two decimal places.
Chapter8: Relationships Among Inflation, Interest Rates, And Exchange Rates
Section: Chapter Questions
Problem 4ST
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