Short Answer
Joanna Williams purchased a one-year Treasury bill at $100. This bond does not have any coupon payment, but Joanna will get $105 at maturity. The inflation rate in a year's time is expected to be 1.3%.
A) What is the income yield from this investment?
B) What is the nominal rate of return from this investment?
C) What is the real rate of return from this investment?
Correct Answer:
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a. 0%
b. 5...View Answer
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Correct Answer:
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b. 5...
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