Determine what is the current nominal rate of interest

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1. If a bond dealer bought a $100,000 municipal bond at 92% of par and sold it at 96% of par, how much money did the dealer make on the bid-ask spread?

2-The one-year real rate of interest is currently estimated to be 3 percent. The current annual rate of inflation is 2 percent, and market forecasts expect the annual rate of inflation to be 5 percent. Approximately, what is the current one-year nominal rate of interest?

Reference no: EM13223813

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