Principles of Corporate Finance_ 12th Edition

Chapter 3 Valuing Bonds 65

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◗ FIGURE 3.8

The return on Treasury bills and the

rate of inflation in the U.K., U.S.,

and Germany, 1953–2014.

Source: E. Dimson, P. R. Marsh, and M. Staunton,

Triumph of the Optimists: 101 Years of Invest-

ment Returns (Princeton, NJ: Princeton Univer-

sity Press, 2002), with updates provided by the

authors.

(a) U.K.

0

15

20

5

10

25

30

Percent, %

Inflation

Treasury bill return

195319561959196219651968197119741977198019831986198919921995199820012004200720102013

Year

(b) U.S.

0

22

6

8

2

4

10

12

14

16

Percent, %

Inflation

Treasury bill return

195319561959196219651968197119741977198019831986198919921995199820012004200720102013

Year

(c) Germany

22

24

0

2

4

6

8

10

12

Percent, %

Inflation

Treasury bill return

195319561959196219651968197119741977198019831986198919921995199820012004200720102013

Year

BEYOND THE PAGE

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Country interest

rates and inflation