Question: 3. Distinction Between Real and Nominal Interest Rates a. Explain the difference between a nominal versus a real interest rate. b. if a bond gives

3. Distinction Between Real and Nominal Interest Rates a. Explain the difference between a nominal versus a real interest rate. b. if a bond gives you a 3% nominal annual interest rate and the ination rate over the year is 5%, what is the real ex post rate of return you receive? Real Rate You Receive 1:. If an investor wants a real rate of return of 3% and expects ination to be 5% next year, what nominal rate should the investor demand? Nominal Rate Investor Demands

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