In the Next Two Years,the Expected Inflation Rates Are 1

question 1

Multiple Choice

In the next two years,the expected inflation rates are 1 percent and 2 percent,respectively,and the real interest rates are expected to be 4 percent and 4 percent,respectively.Using this information,calculate the two-year interest rate yield as of now.

• A)1.88 percent.
• B)2.74 percent.
• C)4.94 percent.
• D)5.56 percent.

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