Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

pls give the exact answer for both questions ill rate up thanks What is the shape of the yield curve given in the following term

image text in transcribed

image text in transcribed

pls give the exact answer for both questions

ill rate up

thanks

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? Term 1 year 3 years 5 years 10 years 2 years 2.42 7 years 3.79 20 years 4.95 Rate (EAR, %) 2.01 2.71 3.31 4.15 What is the shape of the yield curve given the term structure? (Select the best choice below.) A. The yield curve is a flat yield curve. B. The yield curve is a normal yield curve (increasing). C. The yield curve is an inverted yield curve (decreasing). D. It is hard to tell because we are not given an EAR for every year. What expectations are investors likely to have about future interest rates? (Select the best choice below.) A. The yield curve provides no clues as to future interest rate levels. B. Interest rates will likely stay the same in the future. C. Interest rates might rise in the future. D. Interest rates might decrease in the future. In 1975, interest rates were 7.85% and the rate of inflation was 12.3% in the United States. What was the real interest rate in 1975? How would the purchasing power of your savings have changed over the year? (Note: Be careful not to round any intermediate steps less than six decimal places.) What was the real interest rate in 1975? Real rate of interest in 1975 was %. (Round to two decimal places.) How would the purchasing power of your savings have changed over the year? The purchasing power over that year did the following: (Select the best choice below.) A. Increased by 3.96% B. Increased by 4.45% C. Declined by 3.96% D. Declined by 4.45%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Strategies For The Manager

Authors: Charles Priester, Jincheng Wang

1st Edition

3540709630,3540709665

More Books

Students also viewed these Finance questions

Question

in excel Using the data below, what is the value of RMSE

Answered: 1 week ago