suimawi2448 suimawi2448
  • 23-09-2017
  • Social Studies
contestada

Suppose the real rate is 1.9%, and the inflation rate is 3.1%. what nominal rate would you expect to see on a treasury bill?

Respuesta :

shinmin
shinmin shinmin
  • 06-10-2017

Using the Fisher equation, which shows the exact relationship between nominal interest rates, real interest rates, and inflation is:

The solution would be:

(1 +R) = (1 +r)(1 +h)


R= (1 + .031)(1 + .019) – 1


= (1.031)(1.019) – 1


= 1.050589 – 1


=0.050589 or 5.059%

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