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Homework Answers
Ans 9)
| APPROXIMATE REAL RATE = | NOMINAL RATE - INFLATION RATE |
| 7% - 3.8% | |
| 3.20% | |
| EXACT REAL RATE = | ( 1 + Nominal Return) / (1 + Inflation Rate) - 1 |
| ( 1 + 7%) / ( 1 + 3.8%) - 1 | |
| 3.08% | |
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