An investment offers a total return of 11 percent over the coming year. Alex Hamilton thinks the total real return on this investment will be only 7.4 percent. What does Alex believe the inflation rate will be over the next year? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

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Q: What is the yield on a 7-year Treasury note

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Q: 12. Nominal versus Real Returns Say you own an asset that had a total return last year of 12.1…

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Q: 4) wishes to index this amount by about 0.075% per quarter to compensate for inflation effects. How…

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Interest Rate

When you deposit your money with the bank, the deposit earns you some extra money at the end of the specific period – something more than what you deposited. That amount of money that the bank pays you for keeping the money with the bank is the “interest” and the percentage at which the bank pays you for your amount is called the “interest rate”.