Question 8 1 pts Consider the following spot interest rates for maturities of one, two, three,...
Consider the following spot interest rates for maturities of one, two, three, and four years. r1 = 4.4% r2 = 4.9% r3 = 5.6% r4 = 6.4% Assuming a constant real interest rate of 2 percent, what are the approximate expected inflation rates for the next four years? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)
Consider the following spot interest rates for maturities of one, two, three, and four years. r1 = 4.4% r2 = 4.9% r3 = 5.6% r4 = 6.4% Assuming a constant real interest rate of 2 percent, what are the approximate expected inflation rates for the next four years? (Do l1 ___ % l2 ___ l3 ___ l4____
Consider the following spot interest rates for maturities of one, two, three, and four years. r3-5.6 % r4= 6.4 % M=4.5% 2- 4.9% What are the following forward rates, where f, k refers to a forward rate for the period beginning in one year and extending for k years? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) nces 11.1 1,2 f1,3 %
Consider the following spot interest rates for maturities of one, two, three, and four years. 77 = 5.3% 12 = 5.9% 13 = 6.6% 14 = 7.4% What are the following forward rates, where fq. k refers to a forward rate for the period beginning in one year and extending for k years? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Answer is complete but not entirely correct. f1,1 |(1,2 6.50 8.01...
9-18
Return to question Consider the following spot interest rates for maturities of one, two, three, and four years. = 4.1% 2 = 4.5% 13 = 5.2% 84-6.0% What are the following forward rates, where 9. k refers to a forward rate for the period beginning in one year and extending for k years? (Do not round Intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Answer is complete but not entirely correct. 4.90 6.61 X...
Suppose the term structure of interest rates has these spot interest rates: r1 = 6.5%. r2 = 6.3%, r3 = 6.1%, and r4 = 5.9%. a. What will be the 1-year spot interest rate in three years if the expectations theory of term structure is correct? (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.) 1-year spot in 3 years % b. If investing in long-term bonds carries additional risks, then how would...
. Consider the data given below. The one-year rates can be
viewed as spot interest rates, and the two-year rates are yields to
maturity in annualized percent
.
The spot exchange rate is ¥130.15/£.
What should be the two-year forward rate to prevent
arbitrage?
two-year one-year U.K. 1.870 1.205 Japan 0.435 0.375
Question 5 1 pts Consider the following information on Stocks A, B, C and their returns (in decimals) in each state: State Boom 0.17 Good Prob. of State 20% 45% 25% 10% 0.33 0.15 0.02 -0.08 0.21 0.08 0.02 -0.02 Poor 0.09 0.03 -0.02 Bust If your portfolio is invested 25% in A, 40% in B. and 35% in C what is the standard deviation of the portfolio in percent? Answer to two decimals, carry intermediate calcs, to at least...
On May 23, 20XX, the existing or current (spot) one-year, two-year, three-year, and four-year zero-coupon Treasury security rates were as follows: 1R1 = 4.55 percent,1R2 = 4.75 percent,1R3 = 5.25 percent,1R4 = 5.95 percent Using the unbiased expectations theory, calculate the one-year forward rates on zero-coupon Treasury bonds for years two, three, and four as of May 23, 20XX.
all but skip probelm 3 please
:)
1) Consider bank A that offers an interest rate of 8% for one year and bank B that offers a rate of 7% for three years. Assume all rates are continuous compounding, a) Based on this information, what should the two-year forward interest rate one-year from now be to avoid arbitrage? b) Suppose another Bank C offers you 7.5% on r(1,3), the two-year rate, one year forward. What strategy would you employ to...