Calculate the inflation rate for 2020

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Question 1. Here are the details on 4 bonds.  Current market rates are 5.5% for all 4 bonds. Which bond would you buy and why? Hints: Current price is the 'Ask'; Show your calculations.

Bond A ABC Inc.  6%  10 Year  Annual Pay                      Current Price   $1,045.69

Bond B DEF Ltd.  4%  15 Year Quarterly Pay                   Current Price     $850.47

Bond C MLM Inc.  5.5% 6 Year Semi - Annual Pay           Current Price     $998.40

Bond D TJB Ltd. 5.5%  10 Year Annual Pay                      Current Price    $1,000.00

Question 2

 

2019

2020

 

 

 

Inflation

122.00

126.50

GDP

1973.40

2039.20

Unemployment Rate

6.90

6.30

Exchange Vs $US

1.01

0.97

Given the above information (Next page):

A. Calculate the inflation rate for 2020. Is this inside the range desired by the Bank of Canada? Why or why not?

Reference no: EM133069375

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