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If a One-Year Bond Pays a Fixed Interest Rate of 2.5

Question 45

Multiple Choice

If a one-year bond pays a fixed interest rate of 2.5% per year and this year's inflation rate is 2.8%, what is your real rate of return?

A) 5) 3%
B) 2) 8%
C) 2) 5%
D) 0) 3%
E) -0.3%

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