Question: Problem 2 You have some surplus money that you would like to invest now, but you know you will be needing the funds next year
Problem 2 You have some surplus money that you would like to invest now, but you know you will be needing the funds next year when you have plans to go on a graduation trip to Paris, France. Therefore, you are looking fo a risk-free investment so that you can make a little income on your funds, but still have them next year. If the nominal interest rate is 6.8%, expected inflation is 3.2% and the real rate of interest is 2.5%, what rate of return can you expect if you invest your money at the riskless rate
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