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please help. Homework Assignment 4 - Word Add-ins Help Tell me what you want to do 21 Mailing Review View ma . . A. EEEE

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Homework Assignment 4 - Word Add-ins Help Tell me what you want to do 21 Mailing Review View ma . . "A. EEEE . 30./3= Paragraph Aalbec Aabbccb AaBbc Aabbcc Ad . || 1 Normal 1 No Spac.. Heading 1 Heading 2 T Styles 8. The market expects inflation to do the following: remain at 1% for the next year and then increase to 2% for the next two years. What is the inflation premium for a 1-year security? For a 3-year security? If the real risk-free rate is 4% and the maturity risk premium is , what is the yield on a 1-year Treasury bond? A 3-year Treasury bond? 4 points 9. U.S. Treasury bond data shows the following information: Inflation next year is estimated to be 5%, 3% the following year, and 1% thereafter. The real risk-free rate will remain at 3% and the maturity risk premium starts at 0.2% for a 1-year bond and increases by 0.2% for each year after that up to a maximum of 1%. Calculate the interest rates for a 1-, 2-, 3-, 4., 5., and 10- year Treasury securities. Plot a yield curve for the Treasury securities. Plot an estimated yield curve for a AA-rated company on the same curve. What economic information could be taken from this graph? 10 points 10. Smith Corporation's outstanding bonds have a $1000 par value and an 11% semiannual coupon. The bonds mature in 6 years and have a yield to maturity of 9%. What is the market price for the bonds? 3 points 11. Jones, Inc. has bonds outstanding that currently sell for $1100 with a par value of $1000. They

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