Determining real interest rates-financial analyst method


The CFO of our firm has asked you for an approximate answer to this question: What was the real purchasing power associated with the 3 month Treasury bills and 30 year Treasury bonds? Assume the current interest rate on the 3 month Treasury bill is 4.34%, the 30 year Treasury bond is 7.33% and the inflation rate is 2.78%. Also, the chief financial officer wants a short explanation should the 3 month real rate turn out to be less than the 30 year real rate?

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Business Management: Determining real interest rates-financial analyst method
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