Question : Hy Marks buys a one-year government bond January 1,2015, for
Hy Marks buys a one-year government bond on January 1,2015, for $500. He receives principal plus interest totaling $517.5 on January 1, 2016.Suppose that the CPI is 200 on January 1, 2015, and 206.0 on January 1, 2016. This increase in prices is different than Hy had anticipated; his guess was that the CPI would be at 205.0 by the beginning of 2016. The nominal interest rate is %???
(Roundyour answer in percentage points to one decimal place.)