Friday
September 19, 2014

Homework Help: finance

Posted by fran taylor on Friday, January 27, 2012 at 7:36pm.

A treasury note with a maturity of four years carries a nominal rate of interest of 10%. In contrast, an eight year treasury bond has a yeild of 8%.
A. If inflation is expected to average 7% over the first four years,what is the expected real rate of interest.
B. If inflation rate is expected to be 5% for the first year, calculate the average annual rate of inflation for years 2 through 4.
C. If the maturity risk premium is expected to be zero between the two treasury securities, what will be the average annual inflation rate expected over 5 through 8?

Answer this Question

First Name:
School Subject:
Answer:

Related Questions

Finance - A Treasury note with a maturity of four years carries a nominal rate ...
finance - 12. A Treasury note with a maturity of four years carries a nominal ...
finance - 12. A Treasury note with a maturity of four years carries a nominal ...
Finance - A Treasury note with a maturity of four years carries a nominal rate ...
Finance - P5. A thirty U.S. Treasury bond has a 4.0 percent interest rate. In ...
finance - A thirty year US Treasury bond has a 4.0% interest rate.In contrast a ...
Finance - A thirty-year U.S. Treasury bond has a 4.0 percent interest rate. In ...
finance - A thirty-year U.S. Treasury bond has a 4.0 percent interest rate. In ...
Finance - A thirty-year Treasury bond has a 4.0 percent interest rate. In ...
Finance - 4.A thirty year US treasury bond has a 4.0 percent interest rate.In ...

Search
Members