Can you please help me solve number 7 and 8? Please Show calculations where possible.

CHAPTER 6 interest Rates and Bond Valuation 247 a. Using the preceding data, find the real rate of interest at cach point in time b. Describe the behavior of the real rate of interest over the year. What forces might be responsible for such behavior? c. Draw the yield curve associated with these data, assuming that the nominal rates were measured at the same point in time. d. Describe the resulting yield cury ne resulting yield curve in parte, and explain the general expectations embodied in it. P6-7 Term structure of interest rates The following vield data for a number of highest quality corporate bonds existed at each of the three points in time noted. Time to maturity (years) 5 years ago Yield 2 years ago Today 9.1% 9.2 14.6% 12.8 12.2 10.9 9.3 9.5 9,3% 9.8 10.9 12.6 12.7 12.9 13.5 9.4 10.7 10.5 10.5 a. On the same set of axes, draw the yield curve at each of the three given times. b. Label each curve in part a with its general shape (downward sloping, upward sloping, flat). C. Describe the general interest rate expectation existing at each of the three times. d. Examine the data from 5 years ago. According to the expectations theory, what approximate return did investors expect a 5-year bond to pay as of today? LS1) P6-8 Risk-free rate and risk premiums The real rate of interest is currently 3%; the infla- tion expectation and risk premiums for a number of securities follow. Inflation expectation Premium Risk premium Security 3% a. Find the risk-free rate of interest, Ry, that is applicable to each security. b. Although not noted, what factor must be the cause of the differing risk-free found in part a? c. Find the nominal rate of interest for each security. CHAPTER 6 interest Rates and Bond Valuation 247 a. Using the preceding data, find the real rate of interest at cach point in time b. Describe the behavior of the real rate of interest over the year. What forces might be responsible for such behavior? c. Draw the yield curve associated with these data, assuming that the nominal rates were measured at the same point in time. d. Describe the resulting yield cury ne resulting yield curve in parte, and explain the general expectations embodied in it. P6-7 Term structure of interest rates The following vield data for a number of highest quality corporate bonds existed at each of the three points in time noted. Time to maturity (years) 5 years ago Yield 2 years ago Today 9.1% 9.2 14.6% 12.8 12.2 10.9 9.3 9.5 9,3% 9.8 10.9 12.6 12.7 12.9 13.5 9.4 10.7 10.5 10.5 a. On the same set of axes, draw the yield curve at each of the three given times. b. Label each curve in part a with its general shape (downward sloping, upward sloping, flat). C. Describe the general interest rate expectation existing at each of the three times. d. Examine the data from 5 years ago. According to the expectations theory, what approximate return did investors expect a 5-year bond to pay as of today? LS1) P6-8 Risk-free rate and risk premiums The real rate of interest is currently 3%; the infla- tion expectation and risk premiums for a number of securities follow. Inflation expectation Premium Risk premium Security 3% a. Find the risk-free rate of interest, Ry, that is applicable to each security. b. Although not noted, what factor must be the cause of the differing risk-free found in part a? c. Find the nominal rate of interest for each security