Suppose that the 5-year treasury yield is 2.0%; the 5-years TIPS yield is .3%. What is the estimated 5-year inflation rate? a. 0.3% b. 1.2% c. 1.7% d. 2% e. 2.2%

Suppose the spot US$ to Euro rate S = 1.10; the 6-month borrowing rate in Euros = R_Euro= .01; the 6-month future exchange rate US$ to Euros F =1.13. What US$ 6-month interest rate (R_US) would preserve interest rate parity? a. 0.01 b. 0.032 c. 0.065 d. None of the above

At issuance, bond coupon rates are usually set to be ______________ the market yield on similar bonds. a. below b. close to c. above d. none of the above

Suppose a 10-year bond with a par value of $1000 has an annual coupon of 5% and a yield of 4%. What is the approximate present value of the coupon stream? a. $306.54 b. $405.54 c. $506.54 d. $606.54