Consider the following: Fixed-rate Bond Fixed-rate Note Price 107.18 Yield to maturity 5.00% Periods to maturity 18 Modified duration 6.9848 a. For an increase in interest rates of 100 basis points, determine the change in value for the fixed-rate not Show your work. 100.00 5.00% 8 3.5851 b. For an increase in interest rates of 100 basis points, determine the change in value for the fixed-rate bon Show your work. c. Which of the two fixed-rate securities are more sensitive to increases interest rates? Why?

Consider the following term structure of interest rates: Maturity Interest Rate 1-year 4.6% 2-year 5.3% 3-year 6.9% Compute the implied one-year forward rate at the beginning of year 3.

You observe the following term structure: 1-year zero-coupon bond 2-year zero-coupon bond 3-year zero-coupon bond 4-year zero-coupon bond Effective Annual Required A Required B YTM Required: a. If you believe that the term structure next year will be the same as today's, calculate the return on (1) the 1-year zero and (ii) the 4- year zero. b. Which bond provides a greater expected 1-year return? 8.3% 8.4 8.5 8.6 Complete this question by entering your answers in the tabs below. One year return on 1-year bond One year return on 4-year bond If you believe that the term structure next year will be the same as today's, calculate the return on (i) the 1-year zero and (ii) the 4-year zero. Note: Do not round intermediate calculations. Round your answers to 1 decimal place. % %

What would you expect the nominal rate of interest to be if the real rate is 4.2 percent and the expected inflation rate is 6.6 ​percent?       Question content area bottom Part 1 The nominal rate of interest would be enter your response here​%.