User Account

All Pages

Nominal holding periodrate of return

Assignment Help Macroeconomics
Reference no: EM131085947

Suppose you buy a 3 year, zero coupon bond with a face value of $1000 at the timeit is issued.

a. If you buy the bond for $920, what is its nominal yield to maturity?

b. What is the bond's ex-ante real yield to maturity, if the inflation rate is expected toaverage 2% per year over the next 3 years?

c. Suppose that after 2 years, you sell the bond for $990. What nominal holding periodrate of return have you earned?

d. What was your (ex-post) real holding period rate of return if the inflation rate was2% over the two years that you held the bond?

Reference no: EM131085947

Questions Cloud

Complete graph with directed edges : Assignment 2. Recall that a tournament is a complete graph with directed edges (so we think of the vertices as players in a tournament in which every pair of players play each other, with a directed edge (u, v) if u beats v). Fix a positive intege..
Purchase of government bonds : Analyse the effect of an expansionary monetary policy (purchase of government bonds) on the equilibrium interest rate an income in a liquidity trap using the IS-LM model (closed economy and fixed prices). Analyse and discuss.
Write a subprogram with the following specifications : Write a main program which calls this subprogram and displays the generated numbers numerically or. optionally. graphically as a histogram
Generate revenues sufficiently high in relation to costs : The USPS operates a network of more than 31,000 post offices. The majority of these post offices do not generate revenues sufficiently high in relation to costs to justify keeping them in operation. If the USPS were truly a private firm, many of thes..
Nominal holding periodrate of return : a. If you buy the bond for $920, what is its nominal yield to maturity? b. What is the bond's ex-ante real yield to maturity, if the inflation rate is expected toaverage 2% per year over the next 3 years? c. Suppose that after 2 years, you sell the..
Role of police manager in terms of interagency collaboration : Discuss the history of policing as it relates to communication with the public. Discuss how police legitimacy and procedural justice affect the public's perception of public safety. Describe the role of police managers in terms of interagency coll..
Economic decisions and growth of an organization : Discuss your perspective on the use of game theory. How do "Nash Equilibrium" and the idea of one "player" impacting another "player" within an organization affect the economic decisions and growth of an organization?
Provide a brief overview of the retail store : BAMK 2204 - Provide a brief overview of the retail store like see, merchandise classification, pricing strategies, product categories, ambiance interior & exterior, 4 Ps of Marketing and role of Manager and employees at retail store.
Question regarding the calculation of the cpi : What factors are considered in calculation of the CPI? Explain your answer. Where would you find data on CPI and PPI for the United States? What does the current level of inflation tell you about the state of the U.S. economy?

Reviews

Write a Review

Macroeconomics Questions & Answers

  Inflation targeting be a good policy

Why might it be difficult for the Fed to formally adopt inflation targeting?  Would inflation targeting be a good policy for the Fed in the present economic environment

  In using the taylor rule

In using the Taylor Rule as a guideline for monetary policy, what are the pros and cons of using forecasted values of inflation and output rather than observed values of these variables?

  Describe the present economic crisis situation in europe

Describe the present economic crisis situation in Europe.  Why has it been so difficult for the Europeans to find a solution to this problem?   Comment on what implications the crisis may have for the rest of the world if Europeans are not able to ag..

  Long-term federal government budget problems

Question:. Explain why there are long-term Federal government budget problems. Explain why the base-line forecast of the CBO is misleading.

  Derive and compare demand curve

Question based on Derive and compare demand curve,  Derive Ambrose's demand function for peanuts. How does it compare with Johnny's demand curve for peanuts?

  Problem based on utility function

Problem based on  Utility Function - Problem,  Answer and explain the following using a diagram which is completely labeled.

  Laffer curve : tax rate and tax revenue

Question based on Laffer Curve : Tax Rate and Tax Revenue,  Do raising tax rates necessarily raise tax revenue? What factors affect how tax revenue changes when tax rates change?

  Problem - income elasticity of demand

Problem - Income Elasticity of Demand,  Interpret the following Income Elasticities of Demand (YED) values for the following and state if the good is normal or inferior; YED= +0.5 and YED= -2.5

  Positive balance of payment

Question Positive Balance of Payment: "Things will look good for the US if we could just get to where we are consistently running a positive Balance of Payments."

  Effect of recession on the investment curve

Comment on the effect of a recession on the investment curve (only) and on the level of savings, investment, and the equilibrium real interest rate in the financial crisis that hits United States first starting in fall 2007.

  Affect of falling domestic investment on trade surplus and

How will a fall in domestic investment affect the trade surplus and net capital outflows in the domestic economy, the trade deficit and capital inflows in the rest of the world.

  Crises in the banking sector and bank run

Banking crises crisis decreases depositors' confidence in the banking system. What would be the effect of a rumor about a banking crisis on checkable deposits in such a country?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd