Multiple Choice
The expected inflation rate in Finland is 2 % while it is 4 % in Canada. A risk-free asset in Canada is yielding 5.5 %. What real rate of return should you expect on a risk-free Finnish security?
A) 2.0 %
B) 2.5 %
C) 3.0 %
D) 3.5 %
E) 4.0 %
Correct Answer:
Verified
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