Question: a. Explain the difference between a nominal versus a real interest rate. b. If the 1-year Treasury bill rate on January 17, 2018 is 1.77%

a. Explain the difference between a nominal versus a real interest

a. Explain the difference between a nominal versus a real interest rate. b. If the 1-year Treasury bill rate on January 17, 2018 is 1.77% and the inflation expectation for the coming year is 1.90%, what is the expected real rate of return for an investor who purchases the 1-year Treasury bill? Expected Real Rate of Return c. If an investor desires a real rate of return of 2% and expects inflation to be 2% next year, what nominal rate should the investor demand? Nominal Rate Investor Demands

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