Hy Marks buys a one-year government bond on January 1, 2018, for $500.00. He receives principal plus interest totaling $522.50 on January 1, 2019.
Suppose that the CPI is 200.0 on January 1, 2018, and 206.0 on January 1, 2019. This increase in prices is different than Hy had anticipated; his guess was that the CPI would be at 200.0 by the beginning of 2019. The nominal interest rate is â–¢ %. (Enter your answer as a percentage rounded to one decimal place.)
The nominal interest rate is â–¢ %. The actual inflation rate is â–¢ %.
The real interest rate is â–¢ as Hy's expected inflation rate was â–¢ a Hy's expected real interest rate was â–¢
