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labwork [276]
2 years ago
7

if you expect the inflation rate to be 15 percent next year and a one-year bond has a yield to maturity of 7 percent, then the r

eal interest rate on this bond is:
Business
1 answer:
uranmaximum [27]2 years ago
6 0

If the inflation rate is  15 percent. The real interest rate on this bond is:22%.

<h3>Real interest rate </h3>

Using this formula

Real interest rat=Expected inflation rate+ One year yield to  maturity

Let plug in the formula

Real interest rate=15%+7%

Real interest rate=22%

Therefore the inflation rate is  15 percent. The real interest rate on this bond is:22%.

Learn more about real interest rate here:brainly.com/question/6106690


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