You expect inflation next year to be 6%. If you buy a one-year bond with 4% yield to maturity, you will expect the real interest rate on this bond to be:

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Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Chapter1: Investments: Background And Issues
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Question 22
You expect inflation next year to be 6%. If you buy a one-year bond with 4%
yield to maturity, you will expect the real interest rate on this bond to be:
O 10%
O4%
O2%
O-6%
O-2%
Transcribed Image Text:Question 22 You expect inflation next year to be 6%. If you buy a one-year bond with 4% yield to maturity, you will expect the real interest rate on this bond to be: O 10% O4% O2% O-6% O-2%
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