Real Interest Rate = Nominal Interest rate - Inflation Rate
= 11%-1% = 10%
Real Rate is 10.00
Question 2 10 pts Based on the Fisher equation, if expected inflation Tre = 1% and nominal rate nominal = 11%, what...
Question 8 10 pts Consider a $18,000, three-year loan at an interest rate of 2%, payments to be made monthly. What is the APR using simple interest? Note: Show your answer in units of percents, use plain numbers with at least two digits after the decimal (e.g., for 12.34%, type 12.34).
Question 1 10 pts An APR of 16% under monthly compounding gives an EAR of Note: Show your answer in units of percents, use plain numbers with at least two digits after the decimal (e.g., for 12.34%. type 12.34).
Question 3 10 pts An APR of 18% under monthly compounding gives an EAR of Note: Show your answer in units of percents, use plain numbers with at least two digits after the decimal (e.g., for 12.34%, type 12.34).
Question 4 10 pts Estimate the yield to maturity of a bond that is $1,000 par, semi-annual coupon payments, 25 years to maturity, 10% coupon, and is currently selling for $1,200. Note: Show your answer in units of percents, use plain numbers with at least two digits after the decimal (e.g., for 12.34%, type 12.34).
Question 5 10 pts Estimate the yield to call of a bond that is $1,000 par, semi-annual coupon payments, 25 years to maturity, 10% coupon, and is currently selling for $1.200. The bond is callable in 7 years at a 12% call premium. Note: Show your answer in units of percents, use plain numbers with at least two digits after the decimal (e.g., for 12.34%, type 12.34).
Question 1 10 pts Consider an annuity that pays $700 per year for 11 years, with the first payment starting a year later (t=1). What is its future value 11 years from now at an expected return of 14% per year? Note: Show your answer in units of dollars, use plain numbers with at least two digits after the decimal (e.g., for $12,345.67, type 12345.67).
nominal rate of interest The expected inflation rate is 6.6% and the real rate is 5.0%. Including the Fisher effect, the nominal rate of interest is __%. Round your answer to two decimal places.
Question 2 10 pts A stock pays dividends annually. It just paid a dividend of $5 that is expected to grow at a constant rate of 4% forever. Assuming a required rate of return of 13%, what is the value of the stock using the constant growth model? Note: Show your answer in units of dollars, use plain numbers with at least two digits after the decimal (e.g., for $12,345.67, type 12345.67).
Question 9 10 pts Consider a $25,000, three-year loan at an interest rate of 4%, payments to be made monthly. What is the monthly payment using add-on interest? Note: Show your answer in units of dollars, use plain numbers with at least two digits after the decimal (e.g, for $12,345.67, type 12345.67).
Suppose the real interest rate is 3% and expected inflation is 3%. What is the nominal interest rate?nominal interest rate: = _______ %All else equal, if inflation decreases by 0 %, what will happen to the nominal interest rate?The real interest rate will decrease by 0 %.The nominal interest rate will decrease by 0 %.The nominal interest rate will increase by 0 %.The real interest rate will increase by 0 %.What do economists call the relationship between the nominal interest...