What is nominal interest rate on a four-year u.s. government

Reference no: EM13279621

Assume you are at the beginning of 2001. The real risk-free rate of interest is 3 percent and expected to remain constant. Inflation is expected to be 2 percent, 3 percent, 4 percent, and 5 percent in years 2001, 2002, 2003, and 2004, respectively. The default premium is 1 percent. The maturity risk premium on four year bonds is 0.50%. What is the nominal interest rate on a four-year U.S. government bond?

Reference no: EM13279621

Questions Cloud

What is the density of the gas in this geiger tube : A geiger-muller tube is a type of gas-filled radiation detector. It can detect particles like X-rays, alpha particles and beta rays (electrons). what is the density of the gas in this geiger tube

What is the magnitude of the current in the 3-turn loop : A very long, tightly-wound solenoid has a circular cross section of radius r = 2.6 cm . The magnetic field outside the solenoid is negligible. Throughout the inside of the solenoid the magnetic field B is uniform, out of the page as shown, but var..

Explain why an options calculated price may not be the same : Explain why an options calculated price may not be the same as its actual market price?

Design a combinational circuit that detects an error : Design a combinational circuit that detects an error in the representation of decimal digit in Excess-3. The output of the circuit must be equal to logic-1 when the inputs contain any one of the six invalid Excess-3 codes.

What is nominal interest rate on a four-year u.s. government : The default premium is 1 percent. The maturity risk premium on four year bonds is 0.50%. What is the nominal interest rate on a four-year U.S. government bond?

What are the four speeds available for each resistor : A 1/10hp motor has a 1000 rpms with 20v across the armature and series winding there are three speed control switches. The motor speed decreases linearly what are the four speeds available if each resistor is .54 ohms.

What is the sustainable rate of growth : The Green Giant Has a 5 perecnt profit margin and a 40 percent dividend payout ration the total assest turnover is 1.40 and the equilty militiplier is 1.50. What is the sustainable rate of growth?

Write a program that accepts a date from the user : Write a program that accepts a date from the user in the form mm/dd/yyyy and then displays it in the form month dd, yyyy, where month is the written name of the month. Store the month names in an array that contains pointers to strings.

What must the coupon rate be on the bonds : Osbourne Corporation has bonds on the market with 16.0 years to maturity, a YTM of 10.5 percent, and a current price of $943. The bonds make semiannual payments. What must the coupon rate be on the bonds?

User Account

All Pages