Answer :
The Rate of return that one would expect to see on Treasury Bills is 4.55%
Nominal rate of return = ( 1+ Real rate of return) ( 1+ Inflation rate) - 1
Vital banks enforce the quick-time period Nominal rate charge as a tool of fiscal policy. During a financial recession, the nominal rate is lowered to stimulate financial sports. Throughout inflationary periods, the nominal fee is raised.
The actual price of return is the once-a-year fee of return considered after taxes and inflation. However, a fee of return that does not include taxes or inflation is called a nominal charge. Likewise, a rate of go-back that includes taxes or inflation in its calculation is the actual price.
Such an increase owes to 2 factors: the real hobby charge paid with the aid of your funding account, and the overall price of inflation. When you integrate the elements, you get what's referred to as the nominal interest price.
Real rate = 1.8%
Inflation rate = 2.7%
The rate of return on Treasury Bills can be calculated as follows:
Nominal rate of return = ( 1+ Real rate of return) ( 1+ Inflation rate) - 1
Nominal rate of return = (1+ 0.018)(1+ 0.027) - 1
Nominal rate of return = (1.018)(1.027) -1
Nominal rate of return = 1.045486 -1
Nominal rate of return = 0.045486 or 4.55%
The Rate of return that one would expect to see on Treasury Bills is 4.55%
Learn more about the Nominal rate here https://brainly.com/question/28592161
#SPJ4
