An investment offers a 14% total return over the coming year. Bill Morneau thinks the total real return on this investme...
An investment offers a 14% total return over the coming year. Bill Morneau thinks the total real return on this investment will be only 9%.
What does Morneau believe the inflation rate will be over the next year? (Do not round intermediate calculations. Round the final answer to 2 decimal places.)
Homework Answers
Using Fisher's equation:
1+nominal rate=(1+real rate)*(1+inflation)
1.14/1.09=1+inflation
inflation =4.59%
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