The Expected Inflation Rate in Finland Is 2

question 75

Multiple Choice

The expected inflation rate in Finland is 2.8 percent while it is 3.2 percent in the U.S.A risk-free asset in the U.S.is yielding 4.9 percent.What approximate real rate of return should you expect on a risk-free Finnish security?

• A)1.2 percent
• B)1.7 percent
• C)2.1 percent
• D)2.5 percent
• E)2.8 percent

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