Assume that the rate of inflation expected over the coming year is 3.3%. Explain how a 1-year

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Assume that the rate of inflation expected over the coming year is 3.3%. Explain how a 1-year T-bill could earn a negative real rate of return over the next year. How could it have a zero real rate of return? What minimum rate of return must the T-bill earn to meet your requirement of a 2% real rate of return?

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Principles of Managerial Finance

ISBN: 978-0134476315

15th edition

Authors: Chad J. Zutter, Scott B. Smart

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