What is the real risk-free rate of return r disregard

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Suppose 1-year T-bills currently yield 5.00% and the futureinflation rate is expected to be constant at 3.10% per year. What is the real risk-free rate of return, r*? Disregard cross-product terms, i.e., if averaging is required, use the arithmetic average.

Reference no: EM13573577

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