The Current 1-Year Treasury Rate Is 10 Per Cent

question 23

Multiple Choice

The current 1-year Treasury rate is 10 per cent.It is predicted that the annual inflation rate is going to be 0.50 per cent higher than originally expected.The higher inflation forecasts reflect unexpectedly strong macroeconomic conditions.What is the current inflation premium? (Assume that the real rate of interest is 9.0 per cent.)

• A)0.5%.
• B)1%.
• C)1.5%.
• D)11%.

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Definitions:

Lower Chance

Lower chance refers to the reduced likelihood or probability of an event or condition occurring.

Live Together

Refers to the situation where two or more people share a residence and day-to-day life but are not legally married.

Religious Institutions

Organizations associated with a religion or faith, playing roles in worship, moral guidance, community support, and cultural preservation.

Encouraging Remarriage

Refers to societal or individual support for widowed or divorced people to marry again.