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Nominal interest rates and yield curves Economic forecasters predict that the rate of inflation will hold steady at 1.5% per year indefinitely. The table, shows

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Nominal interest rates and yield curves Economic forecasters predict that the rate of inflation will hold steady at 1.5% per year indefinitely. The table, shows the nominal interest rate paid on the Treasury securities having different maturities. a. Approximately what real interest rate do Treasury securities ofler investors at each maturity? b. If the nominal rate of interest paid by every Treasury security suddenly dropped by 0.5% without any change in inflationary expectasions, what effect, if any, would this have on your answers in part a? c. Using your findings in part a, select the appropriate yield curve for U.S. Treasury securities. Describe the general shape and expectations reflected by the curve d. What would a follower of the liquidity preforenco theory say about how the preferences of lenders and borrowers tend to atlect the shape of the yield curve in part c ? e. What would a follower of the markot segmentation theory say about the supply and demand for long-term loans versus the supply and demand for short-term loans given the yield curve in part c ? a. The real rate of interest on the 3-month U.S. Treasury bill is W. (Round to one decimal place.) The real rate of interest on the 2-year U.S. Treasury note is K. (Round to one decimal place.) The real rate of interest on the 5-year U.S. Treasury bond is \%. (Round to one decimal place.) The real rate of interet on the 10-year U.S. Treasury bond is \%. (Round to one docimal place) The real rate of interest on the 20 -year U.S. Treasury bond is \%. (Round to one decimal place.) Data table (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) b. If the nominal rate of interest paid by every Treasury security suddenly dropped by 1% without any change in inflationary expectations, what ellect, if any, would this have on your answers in part a? (Select the best answer below.) A. The reat interest rate in each case would decrease by 1%. B. The real interest rate in each case would increase by 1%. C. The real interest rate in each case would stay the same. D. The real interest rate in each case would decrease by 0.5%. E. The real interest rate in each case would increase by 0.5%. Nominal interest rates and yield curves Economic forecasters predict that the rate of inflation will hold steady at 1.5% per year indefinitely. The table, shows the nominal interest rate paid on the Treasury securities having different maturities. a. Approximately what real interest rate do Treasury securities ofler investors at each maturity? b. If the nominal rate of interest paid by every Treasury security suddenly dropped by 0.5% without any change in inflationary expectasions, what effect, if any, would this have on your answers in part a? c. Using your findings in part a, select the appropriate yield curve for U.S. Treasury securities. Describe the general shape and expectations reflected by the curve d. What would a follower of the liquidity preforenco theory say about how the preferences of lenders and borrowers tend to atlect the shape of the yield curve in part c ? e. What would a follower of the markot segmentation theory say about the supply and demand for long-term loans versus the supply and demand for short-term loans given the yield curve in part c ? a. The real rate of interest on the 3-month U.S. Treasury bill is W. (Round to one decimal place.) The real rate of interest on the 2-year U.S. Treasury note is K. (Round to one decimal place.) The real rate of interest on the 5-year U.S. Treasury bond is \%. (Round to one decimal place.) The real rate of interet on the 10-year U.S. Treasury bond is \%. (Round to one docimal place) The real rate of interest on the 20 -year U.S. Treasury bond is \%. (Round to one decimal place.) Data table (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) b. If the nominal rate of interest paid by every Treasury security suddenly dropped by 1% without any change in inflationary expectations, what ellect, if any, would this have on your answers in part a? (Select the best answer below.) A. The reat interest rate in each case would decrease by 1%. B. The real interest rate in each case would increase by 1%. C. The real interest rate in each case would stay the same. D. The real interest rate in each case would decrease by 0.5%. E. The real interest rate in each case would increase by 0.5%

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