Attempts $$ Keep the Highest $/5$

$4.$ Problem $2-09$

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Problem $2-09$

You are given the following long$-$run annual rates of return for alternative investment instruments:

Annual Rate of Return

$\backslash$table$[[$Investment Instrument,$(\%)],[$U$.$S$.$ Government T$-$bills,$3\mathrm{.}45],[$Large$-$cap common stock,$11\mathrm{.}25],[$Long$-$term corporate bonds,$5\mathrm{.}80],[$Long$-$term government bonds,$4\mathrm{.}75],[$Small$-$capitalization common stock,$12\mathrm{.}90]]$

The annual rate of inflation during this period was $2$ percent. Compute the real rate of return on these investment alternatives. Do not round intermediate calculations. Round your answers to two decimal places.

$\backslash$table$[[,$Real Rate of Return,$],[$U$.$S$.$ Government T$-$bills,,$\%$