Which party would be rewarded at others expense

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Reference no: EM131820868

1. Assume now that the real interest rate is 3% and the expected inflation rate is 6%. If John gets a loan from the bank at 10%, which party would be rewarded at the others expense, John or the bank? Explain your answer.

2. Union Local School District has bonds outstanding with a coupon rate of 3.2 percent paid semiannually and 14 years to maturity. The yield to maturity on these bonds is 3.8 percent and the bonds have a par value of $5,000.

What is the price of the bonds?

Reference no: EM131820868

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