Assuming the Same Coupon Rate and Maturity Length, When the Interest

Multiple Choice

Assuming the same coupon rate and maturity length, when the interest rate on a Real Return Bond is 3 percent, and the yield on a nonindexed Canada bond is 8 percent, the expected rate of inflation is ________.

A) 3 percent
B) 5 percent
C) 8 percent
D) 11 percent