Question
Assume that the inflation rate during the last year was 1.79 percent. US government T-bills had...

Assume that the inflation rate during the last year was 1.79 percent. US government T-bills had the nominal rates of return of 5.57 percent. What is the real rate of return for a T-bill? Round the answer to two decimal places in percentage form. (Write the percentage sign in the units" box)
Answers
(1 + R) = (1 + r)(1 + h)
(1 + 0.0557) = (1 + r)(1 + 0.0179)
r = [(1 + 0.0557) / (1 + 0.0179)] – 1
r = 0.0371 or 3.71%
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