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Exhibit 32 The Annual Rate of Inflation Is 2

question 28

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Exhibit 3.2.
Use the Information Below for the Following Problem(S)
                                               Real Retums
 Investment  Real Returns  Large company stock  Real Annual Return  Small capitalization stock 6.50% Long-term corporate bonds 8.60% Long-term government bonds 3.60% U.S. Treasury bills 2.80% 1.03% \begin{array}{lc}\text { Investment } & \text { Real Returns } \\\hline \text { Large company stock } & \text { Real Annual Return } \\\text { Small capitalization stock } & 6.50 \% \\\text { Long-term corporate bonds } & 8.60 \% \\\text { Long-term government bonds } & 3.60 \% \\\text { U.S. Treasury bills } & 2.80 \% \\\text { 1.03\% }\end{array}

The annual rate of inflation is 2.5%
-Refer to Exhibit 3.2.What is the long term Treasury bond nominal return?

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