Suppose the 1-year nominal interest rate in Zooropa is 9%, and Zooropas expected inflation rate is 4%.

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Suppose the 1-year nominal interest rate in Zooropa is 9%, and Zooropa’s expected inflation rate is 4%. What is the real interest rate in Zooropa?

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International Financial Management

ISBN: 978-0132162760

2nd edition

Authors: Geert Bekaert, Robert J. Hodrick

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Question Posted: May 28, 2012 03:39 AM

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Suppose the 1-year nominal interest rate in Zooropa is 9%, and Zooropas expected inflation rate is 4%.

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International Financial Management

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