What about the norminal rate

Reference no: EM13262008

What two-year interest rate is 13.8% and the expected annual inflation rate is 6.9%.

a. What is the expected real interest rate?

b. If the expected rate of inflation suddenly rises to 8.9%, what does the Fisher theory say about the real interest rate will change?

What about the norminal rate?

Reference no: EM13262008

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