Question: need to learn how to solve using nominal rate, pure rate, inflation rate and risk premium. (Fisher model) The pure rate of interest is 3%,

need to learn how to solve using nominal rate, pure rate,

need to learn how to solve using nominal rate, pure rate, inflation rate and risk premium.

(Fisher model) The pure rate of interest is 3%, and investors demand an inflation premium of 4%. What interest rate should they demand if they require a risk premium of: a. 0%? b. 2%? 5 C. 5%? d. 8%? 2

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