2. Government Treasury bills are yielding 4.15%. Inflation is 2.75%. What is the real rate of return on this financial asset? A. 6.90% B. 7.01% C. 1.36% D. 1.40%

Q: For a nominal interest of 11% and inflation of 5%, according to the Fisher Effect, what would be the…

A: Nominal Interest rate is 11% Inflation rate is 5%   To Find: Approximate real rate of return

Q: Consider the cash flow transactions depicted in the accompanying cas diagram, with the changing…

A: Present value is the equivalent value today based on the time value of the money and the interest…

Q: An investment had a nominal return of 10.6percent last year. If the real return on investment was…

A: Given the following information: Nominal return: 10.6% Return on investment or Real return: 6.3%

Q: The future worth equivalent in year 12 of the cash flows with variable interest rates shown below is…

A: Interest Rate in first 2 years = 3% per year Interest Rate in year 3-9 = 6% per year Interest Rate…

Q: In 2007, interest rates were about 4.5% and inflation was about 2.8%. What was the real interest…

A: Year =2017 Interest Rate = 4.50% Inflation rate= 2.80%

Q: The inflation rate in the USA is 4% and the return on a treasury bill is 6%. Find the inflation…

A: given, inflation = 4% return of treasury bond = 6%

Q: 2.0%), and real GD e federal funds rater

A: D. 25%   Taylor rule suggests that the federal funds rate should be set at 9.25%   Taylor's rule…

Q: 6. The Fisher effect and the cost of unexpected inflation Suppose the nominal interest rate on car…

A: real rate = nominal rate - inflation

Q: Present Value Interest Factors Number of Periods 1 2 3 4 5 5% 9524 .9070 8638 8227 7835 Interest…

A: The table consists of the different number of time periods (usually the number of years) and the…

Q: Consider the following information for a period of years: Arithmetic Mean Long-term…

A: Real return = [(1+ in) / (1+ iI)] - 1 Where as in = Nominal rate ii  = Inflation rate

Q: Required information As indicated, some of the cash flows are expressed in future (then-current)…

A: The present worth of estimated cash flows is a method used to calculate the present value of a…

Q: Consider the following US treasury rate table expressed in percentage. Maturity Yield Last Last…

A: The conceptual formula used:

Q: Problem 07.037 - MIRR calculation For the net cash flow series, find the external rate of return…

A: given information the investment rate = 16% borrowing rate = 11%

Q: B. Calculate the Annual worth of the following cash flow at interest rate equals 7%? 0 25000 1 2…

A: Step 1 The annual worth is the sum of all the advantages and expenses over the course of a year.

Q: .1 Calculate the Payback Period (expressed in years, months and days).  5.2 Calculate the…

A: To determine the payback period, we first need to determine the cumulative cash inflow. In this, we…

Q: Consider the following table for a seven-year period: Returns Year U.S. Treasury Bills Inflation…

A: Data given: Year T-Bills Inflation 1 3.55% -1.17% 2 3.40% -2.31% 3 4.30% -1.21% 4 4.72%…

Q: 6b. An initial $2000 investment is made that returns profits of $1000 and 1500 in the first and…

A: Here, Initial Investment is $2,000 Profit in Year 1 is $1,000 Profit in Year 2 is $1,500 Inflation…

Q: Year 1 2 3 4 Cash Flow $ 1,060 1,290 1,510 2,250 a. If the discount rate is 6 percent, what is the…

A: Future value is the amount of deposit done plus amount of compounded interest accumulated over the…

Q: Assume that the nominal after-tax net return for year 1: $45, year 2: $47, year 3: $49. The after…

A: Present value refers to the current value of the investments that is computed by discounting the…

Q: 2. What is the present value of the following cash flow streams at an interest rate of 6.25%? Which…

A: YEAR CASHFLOW (TOP) CASHFLOW (BOTTOM) 0 0 750 1 75 2450 2 225 3175 3 0 4400 4 300…

Q: Consider the following table for an eight-year period: Year T-bill return Inflation 1 7.47% 8.53% 2…

A: Average return is the sum of the all return dividend by the number of years.…

Q: Suppose we have the following Treasury bill returns and inflation rates over an eiga year period:…

A: The national government has issued short-term financial instruments called Treasury Bills. T-bills…

Q: Average real return

A: The real rate of return is the actual return that the investment earns in a year. This is the return…

Q: Suppose we have the following Treasury bill returns and inflation rates over an eight year period:…

A: t bills year treasury bill return - avg return (return - avg return)2 formula 1 10.45% -0.72%…

Q: the inflation rate in the usa is 4% and the return on a treasury bill is 6%. find the inflation…

A: Inflation-Protected rate of return is the actual rate of return earned on any investment after…

Q: Given the cash flows in actual dollars provided in the following table, calculate the present worth…

A: A loan payment is a regularly scheduled payment made by a borrower to a lender in order to repay the…

Q: Consider the following table for a seven-year period: Returns U.S. Treasury Bills 3.90% 3.75 ITT…

A: A treasury bill can be explained as a money market instrument issued by the government to raise…

Q: Consider the following table for a seven-year period: Year 23456N 7 Returns U.S. Treasury Bills…

A: Real Return= ((1+US treasury Bills)/(1+Inflation rate))-1

Q: Suppose the real rate is 7 percent and the inflation rate is 2.6 percent. What rate would you expect…

A: concept. (1+Rf)  = (1 + RR) * (1+IR) where , Rf = risk free rate RR =real rate IR = inflation rate

Q: 2. Canadian Treasury bills are yielding 2.81%. Inflation is 2.45%. What is the real rate of return…

A: Real interest rate is that rate of interest which does not include the inflation effect. If we…

Q: What is the nominal rate of return on an investment if the real rate of return is 3.41% and the…

A: Real Rate of Return = 3.41%Inflation Rate = 2.50%

Q: Based on economists' forecasts and analysis, 1-year Treasury bill rates and liquidity premiums for…

A: R10.65%E(2r1)1.80%L20.04%E(3r1)1.90%L30.08%E(4r1)2.20%L40.10%

Q: Which one of the following rate is often taken as the representative of the government borrowing…

A: Reverse repo rate is the rate at which the central bank of the country borrows from the country's…

Q: The Fisher effect and the cost of unexpected inflation Suppose the nominal interest rate on car…

A: Answer a) Computation of Expected real interest rate and Actual real interest rate before increase…

Q: If the capital reserve ratio has dropped from 6% to 4% and assuming a $1 million deposit, calculate…

A: given information deposits = 1 million the dropped ratio from 6% to 4%

Q: Using the following information, explain how the BOC uses the channel corridor system to achieve…

A: An interest rate corridor is a system for guiding short term market interest rates towards the…

Q: the nominal interest rate per year is 12% and the inflation rate is 8%, what is the real rate of…

A:

Q: Consider the following table for a seven-year period: Year 1234567 Returns U.S. Treasury Bills…

A: The Fisher equation is an equation in macroeconomics that describes the relationship between nominal…

Q: 6. The Fisher effect and the cost of unexpected inflation Suppose the nominal interest rate on…

A: unexpected inflation costs accumulate when there is a mismatch between supply &demand of market…

Q: Suppose the effective rate of interest is 4% per annum during 2010 and 2011, and 2.4695% per half…

A: The idea of money's time worth holds that an amount of money is worth greater now than it will be at…

Q: please give me answer relatable

A: A. Average Return The average return is the simple mathematical average of a series of returns…

Q: 4 - Based on economistsAc€?c forecasts and analysis, 1-year Treasury bill rates and liquidity…

A: “Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only…

Q: Using the following expected interest payments, cost of debt 5%, and tax-rate = 21%, calculate the…

A: The tax is the tax benefit. As per Income tax act interest is an allowable expense thus there is a…

Q: Problem 07.037 - MIRR calculation For the net cash flow series, find the external rate of return…

A: The MIRR is an improvement over the traditional Internal Rate of Return (IRR) because it addresses…

Q: What is the real interest rate given a nominal rate of 8.7​% and an inflation rate of 1.5​%? A.…

A: The real interest rate is an inflation-adjusted interest rate. It will reflect the real return after…

Interest Rate

When you deposit your money with the bank, the deposit earns you some extra money at the end of the specific period – something more than what you deposited. That amount of money that the bank pays you for keeping the money with the bank is the “interest” and the percentage at which the bank pays you for your amount is called the “interest rate”.