5.1 the Fisher equation tells us that the real interest rate approximately equals the nominal rate minus the inflation rate. Suppose the inflation rate increases from 3% to 5%. Does the Fisher equation imply that this increase willresult in a fall in the real rate of interest? Explain.5.10The continuously conpounded annual return on a stock is normally distributed with a mean of 20% and standard deviation of 30%. With 95.44% confidence, we should expect its actual return in any particular year to be between which pair of values? a. -40.00% and 80.00%b. -30.00% and 80.00%c. -20.6% and 60.6%d. -10.4% and 50.4%
5.1 The Fisher equation tells us that the real interest rate approximately equals the nominal rate minus the inflation rate. Suppose the inflation rate increases from 3% to 5%. Does the Fisher…
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