Nominal interest rate on one-year treasury

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Reference no: EM13116336

According to the international Fisher effect, if U.S. investors expect a 5% rate of domestic inflation over one year, and a 2% rate of inflation in Japan, and require a 3% real return on investments over one year, the nominal interest rate on one-year U.S. Treasury securities would be:

A. 2%

B. 3%

C. -2%

D. 5.06%

E. 8.15

Reference no: EM13116336

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