On July 30, 2021, the following information was available to an investor: Yield on 10 Year TIPS: 0.58% Yield on 10-year Treasury notes: 2.31% What was the expected annual rate of inflation over the next 10 years as of June 30, 2020?
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- On July 30, 2021, the following information was available to an investor:
- Yield on 10 Year TIPS: 0.58%
- Yield on 10-year Treasury notes: 2.31%
- What was the expected annual rate of inflation over the next 10 years as of June 30, 2020?
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- The graph (attached) depicts yield curves for 5 November 2021, 5 November, 2022, and 5 November, 2019. The yield rates are given for each of those in the graph. a) As of today, what is the one-year interest rate expected by financial market participants for November 5, 2023? Does it appear that financial market participants are currently expecting changes in monetary policy within the next two years?The graph (attached) depicts yield curves for 5 November 2021, 5 November, 2022, and 5 November, 2019. The yield rates are given for each of those in the graph (attached). a) As of 5 November 2021, what is the one-month interest rate expected by market participants in 5 January, 2022? Are they expecting a change in monetary policy within that time frame?You are given the following information about an investment account for the year 2021: Value Immédiately Before Deposit 1060 1125 1200 1420 Date Deposit January 1 March 1 August 1 December 31 100 If the annual time-weighted yield rate for this account is 10%, compute the dollar- weighted yield rate, rounded to the nearest tenth of a percent.
- Assuming that the inflation rate from 2017 through 2019 is 6% per year: a) What would be the real value of a $65,000 income in each of the three years? (Show all work) b) What does the real income for 2019 mean?Suppose that for the coming year, the inflation is forecast at an effective annual rate of 1.27%. If a bank offers a high interest rate saving account at an effective annual rate i=1.83%, what is the corresponding real, or inflation adjusted rate of interest for the coming year? 0.4409% 0.553% 0.56% 0.55% 0.69%The graph depicts yield curves for 5 November 2021, 5 November, 2022, and 5 November, 2019. The yield rates are given for each of those in the graph (attached). a) b) As of today, what is the one-month interest rate expected by financial market participants for 5 January, 2022? Does it appear they are expecting changes in monetary policy between now and then?
- The current 90-day forward rate for the baht is $.021. By what percentage is the value of the baht expected to change over the next quarter according to a market-based forecast using the forward rate? What will be the value of the baht in 90 days according to this forecast?(a) Calculate the perpetual equivalent annual worth in future dollars for years 1 through ∞ for income of $50,000 now and $5000 per year thereafter. Assume the market interest rate is 8% per year and inflation averages 4% per year. All amounts are quoted as future dollars. (b) If the amounts had been quoted in CV dollars, what is the annual worth in future dollars?Consider the following situation: at the start of the year, a one-year bill is priced at $920 Economists forecasted that the inflation rate for the year will be 5% but the actual inflation rate is at 6.5%. Calculate the nominal interest rate and the real interest rate.
- In 2020, price index is 135.4 and in 2021 price index is 145.2.What is the inflation rate? Select one: a. 107.24% b. -6.75% c. 7.24% d. 9.80%Using a market interest rate of 6% and an inflation rate of 2.5%, calculate the future equivalent in Year 15 of $10,000 today: (a) Having today’s purchasing power. (b) Having then-current purchasing powerIf inflation during the last 12 months was 2% and the interest rate during that periodwas 5%, what was the real rate of interest? If inflation is expected to average 4%during the next year and the real rate is 3%, what should the current interest ratebe? (3%; 7%)