The Income Yield from a One-Year Infrastructure Bond Purchased Today

question 24

Short Answer

The income yield from a one-year infrastructure bond purchased today is 0.5%. Compute the real return from this bond if the inflation rate a year later is expected to be 4% and the capital gains yield is zero.

---

Definitions:

Cults

Groups that often exhibit extreme or unorthodox beliefs and practices, usually led by charismatic leaders.

Collective Conscience

A collection of common values, thoughts, and ethical stances that act as a cohesive influence within a community.

Durkheim

A French sociologist, social psychologist, and philosopher who is considered one of the founding fathers of sociology.

Marx

Karl Marx was a 19th-century philosopher, economist, and revolutionary, best known for his works on capitalism and communism as well as for founding Marxist theory.