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please do answer all three questions... Thanks in advance.. this is one question with three parts.. so please answer all parts.. If the rate of
please do answer all three questions...
Thanks in advance..
this is one question with three parts.. so please answer all parts..
If the rate of inflation is 4.4%, what nominal interest rate is necessary for you to earn a 3.5% real interest rate on your investment? (Note: Be careful not to round any intermediate steps less than six decimal places.) The nominal interest rate is %. (Round to two decimal places.) X P5-38 (similar to) A Question Help O What is the shape of the yield curve given in the following term structure? What expectations are investors likely to have about future interest rates? 2 years 10 years Term Rate (EAR, %) 1 year 1.99 3 years 2.75 5 years 3.32 7 years 3.77 20 years 4.91 2.42 4.11 What is the shape of the yield curve given the term structure? (Select the best choice below.) O A. It is hard to tell because we are not given an EAR for every year. OB. The yield curve is a flat yield curve. O C. The yield curve is an inverted yield curve (decreasing). D. The yield curve is a normal yield curve (increasing). What expectations are investors likely to have about future interest rates? (Select the best choice below.) O A. Interest rates will likely stay the same in the future. O B. Interest rates might rise in the future. O C. Interest rates might decrease in the future. OD. The yield curve provides no clues as to future interest rate levels. P 5-40 (similar to) A Question Help You are thinking about investing $4,541 in your friend's landscaping business. Even though you know the investment is risky and you can't be sure, you expect your investment to be worth $5,694 next year. You notice that the rate for one-year Treasury bills is 1%. However, you feel that other investments of equal risk to your friend's landscape business offer an expected return of 9% for the year. What should you do? The present value of the return is $. (Round to the nearest cent.) IncorrStep by Step Solution
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