You lent $100 to a friend for one year at a nominal rate of interest of 3

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You lent $100 to a friend for one year at a nominal rate of interest of 3 percent. Infl ation during that year was 2 percent. Did you experience an increase or decrease in the purchasing power of your money? How much did it increase or decrease?

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Fundamentals of Corporate Finance

ISBN: 978-1119371403

4th edition

Authors: Robert Parrino, David S. Kidwell, Thomas Bates

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Question Posted: Jan 16, 2019 08:03 AM

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You lent $100 to a friend for one year at a nominal rate of interest of 3

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Since the interest rate that you received 3 percent exceeded the rate of inflation the am...View the full answer

Fundamentals of Corporate Finance

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