1) If the 6-month zero rate is 0.20% and the 12-month zero rate is 0.30%, then what does the market expect the 6-month zero rate to be in 6 months?
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Q: Suppose that the current 1-year rate (1-year spot rate) and expected 1-year T-bill rates over the…
A: Year 1:Current (Long-Term) Rates = 1R1 = 2.78% Year 2:1R1 = 2.78% or 0.0278E(2r1) = 4.10% or 0.0410…
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Q: nder the unbiased expectations theory, what must today's three year spot rate be? Supposed the three…
A: Excel Spreadsheet:
Q: What would be “The 3x6 month implied forward rate“ if SpotOX6=0.410% and SpotOX3=0.212%?
A: Information Provided: Spot rate for 3 Months = 0.212% Spot rate for 6 Months = 0.410%
Q: if the nominal rate is 11.5% per year compounded continuously, what is the equivalent effective rate…
A: Nominal Rate = 11.5% Continuous Compounding
Q: Quarterly sales have a trend given by Y = 50,000t – 15,000, where Y is sales in pesos and t is the…
A: Trend for Q2 = 50,000t – 15,000 = (50000*6) -15000 = 285000 * As Q2 for 2021 is period 6 from Q1…
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A: Given: 1R1 = 2.50%, E(2r1) = 3.75%, E(3r1) = 4.25%, E(4r1) = 5.75%
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Q: Suppose that the current one-year rate (one-year spot rate) and expected one-year T-bill rates over.…
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- Three-month spot rate is 10% and one-year spot rate is 15%. What is the forward rate between three month and one year under pure expectations theory?A small country is experiencing hyperinflation of 56% per month. A) By what percent have prices climbed after 5 months? B) If an item currently costs $14, how much will it cost after 1 year of such inflation? Text so i can copy itSuppose 6-month Treasury bills are trading at a YTM of 1%, 12-month T-bills are trading at a YTM of 3%. If 18-month Treasury notes with a coupon rate of 4% are trading at par ($100), then what is the 18-month spot rate? Assume semi-annual compounding. Round your answer to 4 decimal places. For example if your answer is 3.205%, then please write down 0.0321.
- Suppose that the current one-year rate (one-year spot rate) and expected one-year T-bill rates over the following three years (i.e., years 2, 3, and 4, respectively) are as follows: 1R1 = 0.3%, E(2r 1) = 1.3%, E(3r1) = 8.9%, E(4r1) = 9.25% Using the unbiased expectations theory, calculate the current (long-term) rates for one-, two-, three-, and four-year-maturity Treasury securities.Quarterly sales have a trend given by Y = 50,000t – 15,000, where Y is sales in pesos and t is the time period with t = 1 in the first quarter of 2020. What is the forecasted sales (to the nearest peso) in the second quarter of 2021 if the seasonal variation using the multiplicative model is 0.93?Suppose that the current 1-year rate (1-year spot rate) and expected 1-year T-bill rates over the following three years (i.e., years 2, 3, and 4, respectively) are as follows:1R1 = 2.78%, E(2r1) = 4.10%, E(3r1) = 4.60%, E(4r1) = 6.10%Using the unbiased expectations theory, calculate the current (long-term) rates for one-, two-, three-, and four-year-maturity Treasury securities. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Year Current (Long-Term) Rates 1 _____.__% 2 _____.__% 3 _____.__% 4 _____.__%
- What is the PV of a stream of 5 consecutive CFs, starting next year. The first CF =$5,000, and the rest are 20% more than the CF of the prior year? The discount rate is 10%?A stopwatch used for TMS has a selling price of P1,500. If its selling price is expected do decline at a rate of 10% per year due to obsolescence, what will be its selling price after 3 years using DBM? A. P1,000 B. P1,500 C. P150.50 D. P1,093.5Suppose that the current 1-year rate (1-year spot rate) and expected 1-year T-bill rates over the following three years (i.e., years 2, 3, and 4, respectively) are as follows:1R1 = 2.62%, E(2r1) = 3.90%, E(3r1) = 4.40%, E(4r1) = 5.90%Using the unbiased expectations theory, calculate the current (long-term) rates for one-, two-, three-, and four-year-maturity Treasury securities. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
- Suppose that the current 1-year rate (1-year spot rate) and expected 1-year T-bill rates over the following three years (i.e., years 2, 3, and 4, respectively) are as follows:1R1 = 2.62%, E(2r1) = 3.90%, E(3r1) = 4.40%, E(4r1) = 5.90%Using the unbiased expectations theory, calculate the current (long-term) rates for one-, two-, three-, and four-year-maturity Treasury securitiesIf you note the following yield curve in The Wall Street Journal, what is the one-year forward rate for the period beginning one year from today, 2f1 according to the unbiased expectations theory? (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)) Maturity Yield One day 1.16 % One year 1.68 Two years 1.92 Three years 2.03 one Year Foward rate = %Suppose a European put has a strike price of $50 on July 5. The put expires in 30 days. Suppose the yield of T-bill maturing in 29 days is 4.6% and the yield of T-bill maturing in 36 days is 10.6%. What is the maximum value of the European put? Please type your answer in the box below and round it up to two decimals.