1. If the inflation free rate is an annual 13% and inflation is an annual 4%, what is the annual market interest rate?
a) 17.52%
b) 17%
c) 17.4%
d) 17.64%
2. If you anticipate an annual inflation rate of 4.0% in the current economy and can make an investment that is expected to appreciate at 8.0% annually, what would be your inflationfree rate of return for this investment?
a) 4.00%
b) 5.15%
c) 4.85%
d) 3.85%