Homework Help Forum: Investing

Posted by Alexandriea on Wednesday, July 22, 2009 at 10:00am.

suppose the real risk - free is 3.50% and the future rate of inflation is expected to be constant at 6.80% . What rateof return would you expect on a 1 yr Treasury security , assuming the pure expectations theory is valid? Disregard cross- product terms, i.e., if averaging is required use the arithmetic average.

• Investing - economyst, Wednesday, July 22, 2009 at 11:31am

  6.8% + 3.5% = 10.3%

  
  

Answer this Question

First Name:
School Subject:
Answer: