Question: Assume the inflation rate is ( 3 . 2 5 % ) APR, compounded annually. Would you rather earn a nominal return
Assume the inflation rate is APR, compounded annually. Would you rather earn a nominal return of APR, compounded semiannually, or a real return of APR, compounded quarterly? Note: Be careful not to round any intermediate steps less than six decimal places.
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To put these on the same basis, you must convert them both to nominal EARs
The EAR for APR, compounded semiannually is
Type your answer in decimal format. Round to six decimal places.
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