What are the nominal interest rate on the bill

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Reference no: EM131305451

Suppose that on January 1, 2012, the price of a one-year Treasury bill is $970.87. Investors expect that the inflation rate will be 2% during 2010, but at the end of the year, the inflation rate turns out to have been 1%.

What are the nominal interest rate on the bill (measured as the yield to maturity), the expected real interest rate, and the actual real interest rate?

Reference no: EM131305451

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