Treasury bills are currently paying 5 percent and the inflation rate is 3.2 percent. a. What is the approximate real rate of interest? (Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the exact real rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Approximate real rate b. Exact real rate % %
Treasury bills are currently paying 5 percent and the inflation rate is 3.2 percent. a. What is the approximate real rate of interest? (Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the exact real rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Approximate real rate b. Exact real rate % %
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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T11
![**Problem 7-12 Calculating Real Rates of Return [LO4]**
Treasury bills are currently paying 5 percent and the inflation rate is 3.2 percent.
a. What is the approximate real rate of interest? *(Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)*
b. What is the exact real rate? *(Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)*
| | % |
|---------------------------|-----|
| a. Approximate real rate | |
| b. Exact real rate | |
**Explanation of Graphs/Diagrams:**
There are no graphs or diagrams present in this image. It contains a table for entering two calculated percentage values: the approximate real rate and the exact real rate.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd2e6bca0-5751-4e3b-9150-515606817feb%2F3d6d7a84-c9c0-49f4-8f7b-b1f17d53ba74%2Fhvtwzoo_processed.jpeg&w=3840&q=75)
Transcribed Image Text:**Problem 7-12 Calculating Real Rates of Return [LO4]**
Treasury bills are currently paying 5 percent and the inflation rate is 3.2 percent.
a. What is the approximate real rate of interest? *(Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)*
b. What is the exact real rate? *(Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)*
| | % |
|---------------------------|-----|
| a. Approximate real rate | |
| b. Exact real rate | |
**Explanation of Graphs/Diagrams:**
There are no graphs or diagrams present in this image. It contains a table for entering two calculated percentage values: the approximate real rate and the exact real rate.
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