finance
posted by fran taylor .
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?

finance 
Damon
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?
Respond to this Question
Similar Questions

finance
A thirty year US Treasury bond has a 4.0% interest rate.In contrast a ten year treasury bond has an interest rate of 3.7%. If inflation is expected to average 1.5% points over both the next ten years and thirty years, determine the … 
finance
12. A Treasury note with a maturity of four years carries a nominal rate of interest of 10 percent. In contrast, an eightyear Treasury bond has a yield of 8 percent. a. If inflation is expected to average 7 percent over the first … 
finance
12. A Treasury note with a maturity of four years carries a nominal rate of interest of 10 percent. In contrast, an eightyear Treasury bond has a yield of 8 percent. a. If inflation is expected to average 7 percent over the first … 
Finance
A Treasury note with a maturity of four years carries a nominal rate of interest of 10 percent. In contrast, an eightyear Treasury bond has a yield of 8 percent. a. If inflation is expected to average 7 percent over the first four … 
Finance
A thirtyyear U.S. Treasury bond has a 4.0 percent interest rate. In contrast, a tenyear Treasury bond has an interest rate of 3.7 percent. If inflation is expected to average 1.5 percentage points over both the next ten years and … 
Finance
A Treasury note with a maturity of four years carries a nominal rate of interest of 10 percent. In contrast, an eightyear Treasury bond has a yield of 8 percent. A. If inflation is expected to average 7 percent over the first four … 
Finance
4.A thirty year US treasury bond has a 4.0 percent interest rate.In contrast, a ten year Treasury bond has an interest rate of 2.5 percent. A maturity risk premium is estimated to be 0.2 percentage points for the longer maturity bond. … 
Finance
P5. A thirty U.S. Treasury bond has a 4.0 percent interest rate. In contrast, a tenyear Treasury bond has an interest rate of 2.5 percent. A maturity risk premium is estimated to be .2 percentage points for the longer maturity bond. … 
Finance
A thirtyyear Treasury bond has a 4.0 percent interest rate. In contrast, a tenyear Treasury bond has an interest rate of 2.5 percent. A maturity risk premium is estimated to be 0.2 percentage points for the longer maturity bond. … 
Principles of Finance
.A thirty year US treasury bond has a 4.0 percent interest rate.In contrast, a ten year Treasury bond has an interest rate of 2.5 percent. A maturity risk premium is estimated to be 0.2 percentage points for the longer maturity bond. …