If you buy a 3 year 5.1% coupon rate TIPS at face value and inflation is 3.4% in year 1, 6.5% in year 2, 5.9% in year 3, what are your total 3-year nominal rate of returns? A. 35.4% B. -14.0% C. 16.1% D. -0.4%
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If you buy a 3 year 5.1% coupon rate TIPS at face value and inflation is 3.4% in year 1, 6.5% in year 2, 5.9% in year 3, what are your total 3-year nominal
A. 35.4%
B. -14.0%
C. 16.1%
D. -0.4%
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- If you buy a 3 year 5.7% coupon rate regular bond at face value and inflation is 4.1% in year 1, 6.0% in year 2, 6.8% in year 3, what are your total 3-year nominal rate of returns? 0 0.2% O 18.1% Ⓒ 39.2 % O-10.5%3. TIPS – calculate the coupon payment TIPS w/ 4% coupon rate. What will coupon payment be in year 2? Year 3? amounts for year 2: 42.02 year 3: 42.44 How did we get these amounts Inflation in year just ended. Year 1: 2% Year 2: 3% Year 3: 1%QUESTION 1 Suppose that 6-month, 12 month, 18-month, 24-month, and 30-month zero rates are 4% 42 4.4% 4.6, and 4.6% per annum with contimuous compounding respectvely Etmat the cash price of a bond with a face value of 100 that will mature in 30 months and pays a coupon of 4% per anm emiannially
- $1000 accummualtes to $1500 in 5 years time and the rate of inflation is 3% p.a. What is the annual effective real rate of return? Question 6Select one:Select one: A. 5.29% B. 6.38% C. 11.70% D. 2.25%You put up $50 at the beginning of the year for an investment. The value of the investment grows 6% and you earn a dividend of $2.50. Your HPR is a. 8% b. 6% c. 9% d. 11% Which of the following statement about inflation is incorrect a. A positive inflation rate reduces purchase power of dollars b. Excess money supply increases inflation c. A positive inflation rate increases the real interest rate d. A positive inflation rate lows the real interest rate0 The yield curve reveals that the 1-year spot rate is 6.5%, the 2-year spot rate is 10.2%, and the 3-year spot rate is 12.4%. What is the duration of a 3-year bond with a face value of $1,000.00 making annual coupon payments of 11.2%? Do not report the Macaulay duration. a. 1.91 O b. 2.22 O c. 1.65 O d. 2.55 O e. O f. 1.76 O g. 2.42 2.05 Oh. 2.69
- Using the financial calculator BA II Plus what are the inputs to use to solve for would you buy a 1,000 FV bond selling for 700 10 yrs to maturity Pays a 5% coupon rate Annual required rate of return is 10% Bond pays coupon semi-annuallyB. Find the annual interest and maturity/yield rate. FACE VALUE COUPON RATE ANNUAL PRESENT VALUE MATURITY/YIELD RATE INTEREST 5. P1,000.00 3% P850 6. P600,000.00 5% P630,000.00A3) Finance Use the data in the following table to calculate a. The effective duration when rates increase from 4% to 4.2% b. The effective duration when rates decrease from 4% to 3.5% 4% Coupon 10-year T-note Yield to Maturity Price 4.50% 97.78 4.20% 99.11 4.00% 100.00 3.80% 100.90 3.50% 102.28
- You observe the following yield curve: YTM 1-year Zero 2-year Zero 6.10% 6.20% 3-year Zero 6.30% 4-year Zero 6.40% (Round your final answers to 2 decimal pleces. Enter percentages "as-Is", without the % sign.) a) If you believe that the yield curve next year will be the same as today's, calculate the holding period return (1-year) on the 1-year Zero and the 4-year Zero. 1-year Zero HPR % 4-year Zero HPR | % b) Recalculate the return on the 4-year zero if you believe in the expectations hypothesis. 4-year Zero HPR %Question 1 : Consider a coupon bond with an 8% annual coupon rate, a 10% interest rate, and a $1000 face value. The bond will mature in 4 years. What is the duration of this bond? Duration is defined as a weighted average of the maturities of the cash payments. Suppose the weight assigned to the maturity of 1 year is W. Show your work. No work, no credit A: Duration 2.28 and W=7.77% B: Duration=3.56 and W-20.5% C. Duration 3.56 and W-23.1% D. Duration=3,56 and W-7.77%1. Consider a real return bond with a face value of $15,000 and a coupon yield of 5.2%. What is the coupon payment after one year if the inflation rate is 6.8%? Select one: a) $817.44 b) $833.04 c) $825.24 d) $809.64 I
