suimawi2448 suimawi2448

23-09-2017
Social Studies

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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

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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