1. Collect any country's Consumer Price Index (CPI)

for 2 consecutive years and calculate its inflation.

Hints: Data may be collected from World bank

database. (2 Marks).

2. (i) Assume any Interest rate for 2 different

securities and a treasury security rate with similar

feature and Calculate Default Risk. (2 Marks)

(in) How do you see the relationship between

interest rate and default risk?