Expected inflation over the next year is E p 10 What nominal interest rate i should investors charge on the following assets a Investors require a real rate of return of 2 percent on a one year corporate bond b Investors require a real return of 6 percent on a portfolio of stocks c Investors require a real return of 10 percent on an investment in an oil field

Question: Expected inflation over the next year is E[p] = 10%. What nominal interest rate i should investors charge on the following assets? a. Investors require

Expected inflation over the next year is E[p] = 10%. What nominal interest rate i should investors charge on the following assets?
a. Investors require a real rate of return of ʀ = 2 percent on a one-year corporate bond.
b. Investors require a real return of ʀ = 6 percent on a of stocks.
c. Investors require a real return of ʀ = 10 percent on an investment in an oil field.

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