Multiple Choiceearned a higher annual rate of return than long-term government bonds.had an annual rate of return in excess of 1.2 percent.provided an annual rate of return that exceeded the annual inflation rate.had a greater variation in returns year-over-year than did long-term government bonds.provided a positive annual rate of return. Based on the chart below, U.S. Treasury bills always:16.00%14.00%12.00%Total Return10.00%8.00%6.00%4.00%2.00%0.00%1926T-BillsYear

A Treasury Bill, or T-Bill, is a short-term debt security issued by the U.S. Department of the…

Answered: Based on the chart below, U.S. Treasury…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Suppose we have the following Treasury bill returns and inflation rates over an eight year period: Year Treasury Bills Inflation 1 10.45% 12.55% 2 11.36 16.00 3 9.06 10.29 4 8.34 7.97 5 8.88 10.29 6 11.23 12.77 7 14.11 16.98 8 15.97 16.90 a. Calculate the average return for Treasury bills and the average annual inflation rate for this period. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Treasury bills % Inflation % b. Calculate the standard deviation of Treasury bill returns and inflation over this period. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Treasury bills % Inflation %…
1, Consider the following table for an eight-year period: Year T-bill return Inflation 1 7.47% 8.53% 2 8.94 12.16 3 6.05 6.76 4 5.97 5.04 5 5.63 6.52 6 8.54 8.84 7 10.74 13.11 8 13.00 12.34 a, Calculate the average return for Treasury bills and the average annual inflation rate (consumer price index) for this period. b, Calculate the standard deviation of Treasury bill returns and inflation over this time period. c, Calculate the real return for each year. d, What is the average real return for Treasury bills?
Consider the following table for an eight-year period: Year T-bill return Inflation 1 7.47 % 8.53 % 2 8.94 12.16 3 6.05 6.76 4 5.97 5.04 5 5.63 6.52 6 8.54 8.84 7 10.74 13.11 8 13.00 12.34 Calculate the average return for Treasury bills and the average annual inflation rate (consumer price index) for this period. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Average return for Treasury bills % Average annual inflation rate % Calculate the standard deviation of Treasury bill returns and inflation over this time period. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Standard deviation of Treasury bills % Standard deviation of inflation % Calculate the real return for each year. (A negative answer should be indicated by a minus sign. Leave no cells…
Why has the current 10-yr US Treasury changed from 2.79% in August to 3.51% now? Why is it increasing?
You observe that the current interest rate on short-term U.S. Treasury bills is 4.86 percent. You also read in the newspaper that the GDP deflator, which is a common macroeconomic indicator used by market analysts to gauge the inflation rate, currently implies that inflation is 1.65 percent. What is the approximate real rate of interest on short-term Treasury bills? (Enter your answer as a percent rounded to 2 decimal places.)
A bank has estimated its net income for 2020 is $2,000,000. It has also estimated the following ratios of its capital: CET1 = 7% Tier 1= 7.50% Tier 1+2= 9% Under Basel 2, what is the maximum, it can pay out in dividends? $0.00 $400,000.00 $800,000.00 $1,200,000.00
The real rate is 3.7 percent and the inflation rate is 5.3 percent. What rate would you expect to see on a Treasury bill?
What is the price of a U.S. Treasury bill with 36 days to maturity quoted at a discount yield of 7.76 percent? Assume a $500,000 face value.
the inflation rate in the usa is 4% and the return on a treasury bill is 6%. find the inflation procted rate for an investor a- 10.24% b-10.00% c-2.00% d-1.92%
Assume that over the past 88 years, U.S. Treasury bills had an average return of 3.5% as compared to 6.1% on long-term government bonds. What was the average risk premium on the long-term government bonds?
A bank has estimated its net income for 2020 is $2,000,000. It has also estimated the following ratios of its capital: CET1 = 7% Tier 1= 7.50% Tier 1+2= 9% Under Basel 2, what is the maximum, it can pay out in dividends? a $0.00 b $400,000.00 c $800,000.00 d $1,200,000.00
12. Canadian Treasury bills are yielding 2.81%. Inflation is 2.45%. What is the real rate of return on the Treasury bill? A. -0.18% B. 0.18% C. 0.36% D. 0.67% E. 1.80%

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Based on the chart below, U.S. Treasury bills always: 16.00% 14.00% 12.00% 10.00% T-Bills