Suppose 1-year t-bills currently yield 700 and the future

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Suppose 1-year T-bills currently yield 7.00% and the future inflation rate is expected to be constant at 3.20% per year. What is the real risk-free rate of return? The cross-product term should be considered, i.e., if averaging is required, use the geometric average.

Reference no: EM13623724

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