If the annualized rate of return on insured tax-exempt


1. If the annualized rate of return on insured tax-exempt municipal bonds will be 3% per annum and the inflation rate remains at 2% per annum, then what will be their real rate of return over 30 years?

2. If the real interest rate is -1% per annum and the inflation rate is 3% per annum, then what is the present value of a $1,000,000 nominal payment next year.

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Financial Management: If the annualized rate of return on insured tax-exempt
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