Inflation, nominal interest rates, and real rates From 1991 to 2000, the U.S. economy had an annual inflation rate of around 3.88%. The historical annual nominal risk-free rate for this same period was around 5.98%. Using the approximate nominal interest rate equation and the true nominal interest rate equation, compute the real interest rate for that decade. What is the estimated real interest rate using the approximate nominal interest rate equation for that decade? % (Round to two decimal places.)

Inflation, nominal interest rates, and real rates From 1991 to 2000, the U.S. economy had an annual inflation rate of around 3.88%. The historical annual nominal risk-free rate for this same period was around 5.98%. Using the approximate nominal interest rate equation and the true nominal interest rate equation, compute the real interest rate for that decade. What is the estimated real interest rate using the approximate nominal interest rate equation for that decade? % (Round to two decimal places.)

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter8: Relationships Among Inflation, Interest Rates, And Exchange Rates

Section: Chapter Questions

Problem 4ST

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Inflation, nominal interest rates, and real rates. From 1991 to 2000, the U.S. economy had an annual inflation rate of around 3.11%. The historical annual nominal risk-free rate for this same period was around 6.74%. Using the approximate nominal interest rate equation and the true nominal interest rate equation, compute the real interest rate for that decade. What is the estimated real interest rate using the approximate nominal interest rate equation for that decade? nothing% (Round to two decimal places.)
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