Question
In: Finance
Year T-bill return Inflation 1 7.36% 8.64% 2 8.39 12.27
| Year | T-bill return | Inflation |
| 1 | 7.36% | 8.64% |
| 2 | 8.39 | 12.27 |
| 3 | 5.94 | 6.87 |
| 4 | 5.42 | 4.93 |
| 5 | 5.52 | 6.63 |
| 6 | 7.99 | 8.95 |
| 7 | 10.63 | 13.22 |
| 8 | 12.45 |
12.45 |
Calculate the standard deviation of Treasury bill returns and inflation over this time period. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
Solutions
Expert Solution
SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE
JUST WRITTEN IN EXCEL. ALL
FORMULAS ARE SHOWN
jeff jeffy answered 2 years agoRelated Solutions
Consider the following table for an eight-year period: Year T-bill return Inflation Year 1 7.36% ...
Consider the following table for an eight-year period:
Year
T-bill return
Inflation
Year 1
7.36%
8.64%
Year 2
8.39
12.27
Year 3
5.94
6.87
Year 4
5.42
4.93
Year 5
5.52
6.63
Year 6
7.99
8.95
Year 7
10.63
13.22
Year 8
12.45
12.45
Requirement 1:
Calculate the average return for Treasury bills and the average
annual inflation rate (consumer price index) for this period.
(Do not round intermediate calculations.
Enter your answers as a percentage...
Consider the following table for an eight-year period: Year T-bill return Inflation 1 7.31 % 8.69...
Consider the following table for an eight-year period:
Year
T-bill return
Inflation
1
7.31
%
8.69
%
2
8.14
12.32
3
5.89
6.92
4
5.17
4.88
5
5.47
6.68
6
7.74
9.00
7
10.58
13.27
8
12.20
12.50
Calculate the average return for Treasury bills and the average
annual inflation rate (consumer price index) for this period.
(Do not round
intermediate calculations and enter your answers as a percent
rounded to 2 decimal places, e.g., 32.16.)
Average return
for...
Consider the following table for an eight-year period: Year T-bill return Inflation 1 7.40 % 8.60...
Consider the following table for an eight-year period:
Year
T-bill return
Inflation
1
7.40
%
8.60
%
2
8.59
12.23
3
5.98
6.83
4
5.62
4.97
5
5.56
6.59
6
8.19
8.91
7
10.67
13.18
8
12.65
12.41
Calculate the average return for Treasury bills and the average
annual inflation rate (consumer price index) for this period.
(Do not round intermediate calculations and enter your
answers as a percent rounded to 2 decimal places, e.g.,
32.16.)
Average return for Treasury...
1-The real interest rate is 0.21%, a 1-year T-Bill rate is 1.09% and the 2 year T-Note rate is 1.36% with no MRP. What is the inflation expected the year after next?
1-The real interest rate is 0.21%, a 1-year T-Bill rate is 1.09% and the 2 year T-Note rate is 1.36% with no MRP. What is the inflation expected the year after next?
2-If you purchase a 20-year T-bond, which of the following sources of risk are you most concerned about?
A)The possibility that you will not be able to resell the T-bond.
B)The possibility that the bond's MRP will be zero
C)The possibility that the issuer will default on...
T-bill has an interest rate of 1-3% and that a good return would be something that...
T-bill has an interest rate of 1-3% and that a good return would
be something that had higher than the risk free rate, so does that
also mean that anything that yields more than or the same as a
T-bill after adjusting for the risk rate will be considered "good"?
If that is the case how would you decide what would be considered
"good" if there was inflation?
INTEREST RATES= INFLATION PREMIUM + Compensation for risk free rate ( T Bill Rate ) of...
INTEREST RATES= INFLATION PREMIUM + Compensation for
risk free rate ( T Bill Rate ) of return + specific risk premium
compensation ( Default Risk, Liquidity Risk, Maturity Risk,
Opportunity risk, etc).
compare and contrast the various methods used by banks
to assess interest rate risk to their net interest rate margin?
Suppose a bond such as a Treasury bill, or T-bill, promises to pay $1000 a year,...
Suppose a bond such as a Treasury bill, or
T-bill, promises to pay $1000 a year, and the
interest rate is 15%. Given this information, we know that the
bond's price must be:
Answer the following questions using the following data
Y=C+I+G
C=120+0.5(Y-T)
I=100-10r
T=40
= Y-20r
M=600
P= 2
Identify the each of the variables and briefly explain their
meanings.
Find the IS curve and the LM curve and graph them in a
diagram.
Determine the equilibrium interest...
2-4 You can purchase a T-bill that is 73 days from maturity for $16,965. The T-bill...
2-4 You can purchase a T-bill that is 73 days from maturity for
$16,965. The T-bill has a face value of $17,000. a. Calculate the
T-bill’s quoted yield. (Use 360 days in a year. Do not round
intermediate calculations. Round your answer to 3 decimal places.
(e.g., 32.161)) T-bill’s quoted yield % b. Calculate the T-bill’s
bond equivalent yield. (Use 365 days in a year. Do not round
intermediate calculations. Round your answer to 3 decimal places.
(e.g., 32.161)) T-bill’s...
Suppose that the current 1-year rate (1-year spot rate) and expected 1-year T-bill rates over the...
Suppose that the current 1-year rate (1-year spot rate) and
expected 1-year T-bill rates over the following three years (i.e.,
years 2, 3, and 4, respectively) are as follows:
1R1 =
1%, E(2r1) = 4.25%,
E(3r1) = 4.75%,
E(4r1) = 6.25%
Using the unbiased expectations theory, calculate the current
(longterm) rates for 1-, 2-, 3-, and 4-year-maturity Treasury
securities. Plot the resulting yield curve. (Do not round
intermediate calculations. Round your answers to 2 decimal
places.)
Suppose that the current 1-year rate (1-year spot rate) and expected 1-year T-bill rates over the...
Suppose that the current 1-year rate (1-year spot rate) and
expected 1-year T-bill rates over the following three years (i.e.,
years 2, 3, and 4, respectively) are as follows:
1R1 = 3.26%,
E(2r1) = 4.70%,
E(3r1) = 5.20%,
E(4r1) = 6.70%
Using the unbiased expectations theory, calculate the current
(long-term) rates for 1-, 2-, 3-, and 4-year-maturity Treasury
securities. (Do not round intermediate calculations. Round
your answers to 2 decimal places.)
1
2
3
4
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