The fisher effect has all of the components

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Reference no: EM131989990

1. The Fisher Effect has all of the following components, except:

A) Real Rate on the Investment, r

B) Compensation for Inflation of Original Investment, h

C) Expected Rate of Return, E

D) Compensation for Inflation on Investment Earned

2. You are considering the purchase of a 15-year $1,000 face value bond that pays interest of $90 annually. If you required a return of 10%, how much should you be willing to pay for this bond?

A. $1,124.65

B.$1,000.00

C. $923.94

D. $873.15

E. $1,080.60

Reference no: EM131989990

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