Nico Nelson, a management trainee at a large New York-based bank, is trying to estimate the real rate of return expected by investors
He notes that the 3-month T-bill currently yields 3 percent and has decided to use the consumer price index as a proxy for expected inflation. What is the estimated real rate of interest if the CPI is currently 2 percent?
A) 5%
B) 1%
C) 3%
D) 2%
B
You might also like to view...
What is the guiding concept behind LinkedIn?
A) connecting with high-school classmates and old friends B) providing a point-to-point user connection among media C) establishing a "who you know" network of business colleagues D) setting parameters for professional networking
To use the Delphi technique, a group leader would assemble the members, present the problem, and invite each to suggest possible solutions. There would be no evaluation of the suggestions until all possible solutions had been submitted
Indicate whether the statement is true or false