Find the equivalent level annual real rate of return

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Reference no: EM132701822

Consider an investment of $1000 with a yield rate of 8% during the first year and 7% during the second year. The inflation rate is 2.5% during the first year and 2.7% during the second year.

Problem 1: Find the equivalent level annual REAL rate of return for the 2 years. (The rates are in effective per annum form)

A 3.17%

B 4.77%

C 4.9%

D 6.77%

E 9.78%

Reference no: EM132701822

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