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March 1, 2015

March 1, 2015

Posted by **Anonymous** on Wednesday, February 13, 2013 at 4:02pm.

ECONOMIC FORECAST INTEREST RATE FORECAST

Recession 6 percent

Constant growth 9 percent

Inflation 14 percent

A. What is the expected interest rate under Ima's forecast?

B. What is the variance and standard deviation of Ima's interest rate forecast?

C. What is the coefficient of variation of Ima's interest rate forecast?

D. If the current long-term Treasury bond interest rate is 8 percent, should Ima consider purchasing a Treasury Bond? Why or why not?

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