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