minal interest rate on Philippine Treasury bills is 5.75%. Actual inflation rate in 2021 is 4.5%. The country is aiming to achieve a 3-year annual average GDP growth of 7.3% as it accelerates its vaccination for the population and further reopens the economy. In line with the GDP growth outlook, economists are expecting a general increase in prices by 3%. Which of the following is/are correct? Nominal interest rate is affected by the actual inflation rate. Thus, the real interest rate is 1.25%. Real interest rate is affected by the economic outlook. Thus, real interest rate is 13.05%. Nominal interest rate is affected by the actual inflation rate. Thus, the real interest rate is 10.25%. Nominal interest rate is affected by the expected inflation. Thus, the real interest
minal interest rate on Philippine Treasury bills is 5.75%. Actual inflation rate in 2021 is 4.5%. The country is aiming to achieve a 3-year annual average GDP growth of 7.3% as it accelerates its vaccination for the population and further reopens the economy. In line with the GDP growth outlook, economists are expecting a general increase in prices by 3%. Which of the following is/are correct? Nominal interest rate is affected by the actual inflation rate. Thus, the real interest rate is 1.25%. Real interest rate is affected by the economic outlook. Thus, real interest rate is 13.05%. Nominal interest rate is affected by the actual inflation rate. Thus, the real interest rate is 10.25%. Nominal interest rate is affected by the expected inflation. Thus, the real interest
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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The nominal interest rate on Philippine Treasury bills is 5.75%. Actual inflation rate in 2021 is 4.5%. The country is aiming to achieve a 3-year annual average GDP growth of 7.3% as it accelerates its vaccination for the population and further reopens the economy. In line with the GDP growth outlook, economists are expecting a general increase in prices by 3%. Which of the following is/are correct?
Nominal interest rate is affected by the actual inflation rate. Thus, the real interest rate is 1.25%.
Real interest rate is affected by the economic outlook. Thus, real interest rate is 13.05%.
Nominal interest rate is affected by the actual inflation rate. Thus, the real interest rate is 10.25%.
Nominal interest rate is affected by the expected inflation. Thus, the real interest rate is 2.67%.
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