1. From memory, write down the relationship between nominal rates of return (rnominal), real rates of return (rreal), and the inflation rate (π).
2. The nominal interest rate is 20%. Inflation is 5%. What is the real interest rate?
3. If the real interest is 3% per annum and the inflation rate is 8% per annum, then what is the present value of a $500,000 nominal payment next year?
4. What are the three types of Treasuries? How do they differ?