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Compute the two-year nominal interest rate (2) using the exact formula and the approximation formula for each set of assumptions listed in the following tables.

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Compute the two-year nominal interest rate (2) using the exact formula and the approximation formula for each set of assumptions listed in the following tables. The assumptions are in each table's first three columns: they give values for the current one-year interest rate (4), next year's expected one-year interest rate (+1), and the term premium on a two-year bond (x). Enter your response for the approximate rate as calculated for the exact rate, round your response to three decimal places 12 Term Premium Exactit Approx. 5% 6% 0% Enter your response for the approximate rate as calculated for the exact rate, round your response to three decimal places Term Approx. 121 Premium 5% 10% 0% Exactia Enter your response for the approximate rate as calculated for the exact rate, round your response to three decimal places Exactia Approx. 12 Term Premium 3% 4% 5% Enter your answer in each of the answer boxes Compute the two-year nominal interest rate (2) using the exact formula and the approximation formula for each set of assumptions listed in the following tables. The assumptions are in each table's first three columns: they give values for the current one-year interest rate (4), next year's expected one-year interest rate (+1), and the term premium on a two-year bond (x). Enter your response for the approximate rate as calculated for the exact rate, round your response to three decimal places 12 Term Premium Exactit Approx. 5% 6% 0% Enter your response for the approximate rate as calculated for the exact rate, round your response to three decimal places Term Approx. 121 Premium 5% 10% 0% Exactia Enter your response for the approximate rate as calculated for the exact rate, round your response to three decimal places Exactia Approx. 12 Term Premium 3% 4% 5% Enter your answer in each of the answer boxes

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