consider a consol/perpetuity that pays $100 every period forever. If current yield on the consol was 4% in period t and increased to 5% in period t+1. During this period, the inflation rate was 2%. Then what is the real rate of return for someone who bought it in period t and sold it in period t+1?

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Real Rate of Return RRR Nominal Rate NR Inflation Rate IR Step 1 Calculate the price change due t... View the full answer