Calculate the real interest rate

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In May 2012, the nominal interest rate on the one-year Treasury bill was 0.19 percent. From May 2012 to May 2013, the consumer price index rose from 228.6 to 231.8. If you bought the one-year Treasury bill in May 2012, calculate the real interest rate you earned over the following 12-month period. Given the results of your calculation, why were investors willing to buy Treasury bills in May 2012?

Reference no: EM131023391

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