Using the fisher equation

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Reference no: EM131442381

Using the Fisher equation

a. Describe what should happen to the nominal interest rate stated as a percent if inflation meets the Fed’s expectation of 2% and the real rate is 1% for the coming 2 years. (Be accurate out to the second place behind the decimal for the percent, ie, to the basis point.)

b. In that case, how much will the current two-year rate increase from its value as of Friday. Jan. 27.

Reference no: EM131442381

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