What is bond interest rate

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Reference no: EM13790581

Review the interest rate calculations examples provided in your text, and determine the following (set calculations to 4 decimal places):

Calculate the 10-year and 15-year estimated interest rate based on the following information:
- MRP = 0.19(t - 1)
- Real rate or r* = 4
- Inflation in year 1 and 2 = 3%, inflation in 3 and 4 = 5%, and inflation in year 5 and beyond = 7%
- Present your solution in the same format as in learning sphere activities and the textbook chapter reading in this Learning Process.
If the real interest rate during the year was 3% and the interest rate during that period for 1 year US Treasury was 7.25%, what was the inflation rate of interest?
Assume that the real risk-free rate is r* = 3.15% and the average expected inflation rate is 2.2% for each future year. The bond's DRP is 1%, LP is 0.05%, and the MRP is expected to be 1.5%. What is Bond's interest rate?

Reference no: EM13790581

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