The Expected Inflation Rate in Finland Is One % While

question 174

Multiple Choice

The expected inflation rate in Finland is one % while it is three % in the U.S. A risk-free asset in the U.S. is yielding 6.25 %. What approximate real rate of return should you expect on a risk-free Norwegian security?

• A) 2.00 %
• B) 3.25 %
• C) 3.50 %
• D) 4.25 %
• E) 4.50 %

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