Suppose the inflation rate in Canada, as measured by the CPI, has been averaging 3.5 percent in

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Suppose the inflation rate in Canada, as measured by the CPI, has been averaging 3.5 percent in recent years. The most recent Bank of Canada announcement indicates that it expects 3-percent inflation over the next year. If the real rate of return on Canadian T-bills is 1.5 percent, what is the nominal risk-free rate?

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Introduction To Corporate Finance

ISBN: 9781118300763

3rd Edition

Authors: Laurence Booth, Sean Cleary

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