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Bank change customer on loan

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Reference no: EM131114851

Suppose that a Bank wishes to realize a real interest rate of 3 percent given on a loan. It expects that inflation over the course of the year will be 4 percent. Then, what nominal interest rate should the bank change this customer on his loan?

  1. -1%

  2. 1%

  3. 7%

  4. 12%

  5. None of the above

Reference no: EM131114851

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