If the market interest rate is 16% and the inflation rate is 10%, determine the real interest rate. O 5.45% O 26% O 16.63% O 6.84%

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Q: Spot Rate 1 $-30.60 B 3Mth Forward Rate 1$ = 30.50 B US flation Rate 3% terest Rate 3% ΤΗ 2% 2%

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Q: QUESTION 12 Today, markef interest rates on US Treasury securities are 3 8% on one yoar (maturity)…

A: Note:  This post has two questions. The first has been solved below.

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A:

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A: R10.70%E(2r1)1.85%L20.05%E(3r1)1.95%L30.10%E(4r1)2.25%L40.12%

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A: Interest rate factor = FV/PV             = 297/240             = 1.2375

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