If you expect inflation to be 2 percent next year and you buy a one-year bond paying 5 percent interest, what is your after-tax expected real interest income if the price of the bond is $200 and your tax rate is 40 percent?
A)$0.20
B)$20
C)$10
D)$2

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The Answer of If you expect inflation to be 2 percent next year and you buy a one-year bond paying 5 percent interest, what is your after-tax expected real interest income if the price of the bond is $200 and your tax rate is 40 percent?
A)$0.20
B)$20
C)$10
D)$2

If You Expect Inflation to Be 2 Percent Next Year