Use the following interest rate data to answer the next five questions: Treasury Bills, 90 days 4.20% Commercial Paper, 90 days 4.84% Treasury Bill, 1 year 4.67% Treasury Note, 2 year 5.25% Corporate Bond AA, 20 year 8.23% Municipal Bond AA, 20 year 6.42% Expected Annual Inflation Rate 3.00%

(d) ANSWER With reference to the data above, the default risk premium on the 90-day commercial paper above is a. 3.39% b. 0.17% c. 0.64% d. 1.84%

(b) ANSWER -With reference to the data above, the implied one-year forward rate (expected one-year rate one year from now) on Treasuries is a. 4.67% b. 5.83% c. 5.58% d. 4.09% (c)ANSWER With reference to the above data, at what marginal tax rate would an investor be indifferent between owning the corporate bond and the municipal bond? a. 18% b. 20% c. 22% d. 28%

(b) ANSWER-With reference to the above data, what is the approximate expected pre-tax real rate of return on the one-year Treasury bill? a. 3.00% b. 1.62% c. 4.67% d. 0.13%

(c)ANSWER-With reference to the data above, what is the expected after-tax real rate of return on the one-year Treasury Bill for an investor in the 33 percent marginal tax bracket? a. 1.11% b. 3.13% c. 0.13% d. -1.11% NOW SHOW ME HOW THEY CALCULATED THESE ANSWERS STEP BY STEP OR CALCULATOR KEYS