Question 2 (a) Assume you just deposited RM5,000 into a bank account. The current real interest rate is 3% and inflation is expected to be 8% over the next year. What nominal interest rate would you require from the bank over the next year? How much money will you have at the end of one year? If you are saving to buy a new laptop that currently sells for RM5,200, will you have enough to buy it? (10 marks)

(b) What is Yield to Maturity? Explain FOUR (4) types of credit market instruments that incorporate Yield to Maturity in their calculations. (15 marks)