Multiple Choice
Suppose you buy an inflation-indexed bond that will adjust with inflation and thus pay you $1,500 in real (inflation- adjusted) terms in one year.The real interest rate is 3 percent.What is the present value of the bond? (Round off your answer to the nearest dollar and pick the answer closest to the one you calculate.)
A) $1,415
B) $1,456
C) $1,471
D) $1,530
Correct Answer:
Verified
Correct Answer:
Verified
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