Multiple Choice
A municipality issued bonds to finance its infrastructure projects. The bonds pay 6.5% per year. If expected annual inflation is 3.5%, what is the real rate of return on these bonds?
A) 2.90%
B) 3.00%
C) 3.50%
D) 6.50%
E) 10.23%
Correct Answer:
Verified
Correct Answer:
Verified
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