Nominal interest rate on treasury security

Reference no: EM13746669

The real risk-free rate is 2%. Inflation is expected to be 3%this year 4% next year, and then 3.5% thereafter. The maturity risk premium is estimated to be 0.0005% x (t-1), where t = number of years to maturity. What is the nominal interest rate on a 7 year Treasury security?

Reference no: EM13746669

Questions Cloud

Biographical information about the artist pollock and warhol : Biographical information about the artist Pollock and Warhol whose work is assigned or (in SLP assignments) chosen for reflection.

Value of stocks households hold : Suppose the household wealth decreases due to a decline in the stock market asset prices - At the long-run macroeconomic equilibrium, the stock market boom occurs and increases the value of stocks households hold.

Problem related to yohe telecommunications : Yohe Telecommunications is a multinational corporation that produces and distributes telecommunications technology. Although its corporate headquarters are located in Maitland, Florida, Yohe usually buys its raw materials in several different fore..

What skills or abilities does a manager need : What skills or abilities does a manager need to lead effectively in a virtual environment? Do you believe a leader with a consideration style or an initiating structure style would be more successful as a virtual leader? Explain

Nominal interest rate on treasury security : The real risk-free rate is 2%. Inflation is expected to be 3%this year 4% next year, and then 3.5% thereafter. The maturity risk premium is estimated to be 0.0005% x (t-1), where t = number of years to maturity. What is the nominal interest rate o..

Length of the firm cash conversion cycle : The Zocco Corporation has an inventory conversion period of 60days,an average collection period of 38days and a payables deferral period of 30days.Assume that costs of goods sold is 75% of sales.

Current price of the stock and the strike price : The exercise value is the positive difference between the current price of the stock and the strike price. The exercise value is zero if the stock's price is below the strike price.

Problem related to christie corporation : The Christie Corporation is trying to determine the effect of its inventory turnover ratio and days sales outstanding(DSO) on its cash flow cycle. Christie's sales last year(on all credit)were $150,000,and it earned a net profit of 6%, or$9,000. I..

Significant changes in international taxation : Predict what you believe will be the most significant changes in international taxation you will likely see in the next few years. Explain your reasoning.

User Account

All Pages