Calculate the expected real interest rate

Reference no: EM131023428

[Calculating the real interest rate] Go to the Web site of the Federal Reserve Bank of St. Louis (FRED) (research .stlouisfed.org/fred2/).

a. Find the most recent values for the 3-Month Treasury Bill: Secondary Market Rate (TB3MS) and the University of Michigan Inflation Expectation (MICH).

b. Using the data you found in part (a), calculate the expected real interest rate.

c. If the actual inflation rate is greater than the expected inflation rate, how are borrowers and lenders affected?

Reference no: EM131023428

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