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Amy would like to take out a loan with her local bank where they want...

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Finance

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Amy would like to take out a loan with her local bank where they want a real interest rate of 2%. Assuming that the annualized expected rate of inflation over the life of the bond is 4%, i. Determine the nominal interest rate that the bank will charge you. ii. If inflation turns out to be only 1% is Amy better or worse off as a borrower? w A/

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