10.Captain Agooji bought the 4-year Treasury note at the par value of GHS100. The coupon rate on the note was 15% and coupon payments were made annually. When Agooji received the first interest, he could invest it for 17% interest; when the second interest was received, he could invest it for 16% interest; and when the third interest was received, he could invest it for 15% interest. When the fourth and final interest was received, average interest rate was 14%.

Required:

Assuming Captain Agooji reinvested coupon payments at the respective interest rates over the holding period, compute the realised compound rate of return on his investment in the note.

17. Ms Tonia Anderson buys 182-day treasury bills at the price of GHS8,800 today. She expects to receive GHS10,000 at end of the investment period. Inflation is expected to be 17% in the coming year.

Required:

(a) Compute the holding period return on the investment.

(b) Compute the annualised nominal rate of return on the investment.

(c) Compute the annual real rate of return on the investment.