What average rate of inflation is expected in this country

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Reference no: EM131526987

An analyst is evaluating securities in a developing nation where the inflation rate is very high. As a result, the analyst has been warned not to ignore the cross-product between the real rate and inflation. A 6-year security no maturity, default, or liquidity risk has a yield of 20.75%. If the real risk-free rate is 5.75%, what average rate of inflation is expected in this country over the next 6 years? Do not round intermediate calculations.

Reference no: EM131526987

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