Consider the following table for a seven-year period: Year 1234567 Returns U.S. Treasury Bills Inflation 3.55% -1.17% 3.40 4.30 4.72 2.52 1.40 1.13 -2.31 -1.21 0.63 -6.45 -9.37 -1.32 What was the average real return for Treasury bills for this time period? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal

Consider the following table for a seven-year period: Year 1234567 Returns U.S. Treasury Bills Inflation 3.55% -1.17% 3.40 4.30 4.72 2.52 1.40 1.13 -2.31 -1.21 0.63 -6.45 -9.37 -1.32 What was the average real return for Treasury bills for this time period? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter8: Relationships Among Inflation, Interest Rates, And Exchange Rates

Section: Chapter Questions

Problem 2IEE

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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…
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?
Based on economists' forecasts and analysis, 1-year Treasury bill rates and liquidity premiums for the next four years are expected to be as follows: R1 = 0.40% E(271) 1.55% 1.65% E(371) = E(471) = 1.95% 42- 0.05% L3 = 0.10% L4 - 0.12% Years 1 2 3 4 M Using the liquidity premium theory, determine the current (long-term) rates. Note: Do not round intermediate calculations. Round your percentage answers to 2 decimal places (i.e., 0.1234 should be entered as 12.34). Current (Long-term) Rates % % % %
Based on economists’ forecasts and analysis, 1-year Treasury bill rates and liquidity premiums for the next four years are expected to be as follows: R1 = 2.00 % E(2r1) = 2.90 % L2 = 0.06 % E(3r1) = 3.30 % L3 = 0.08 % E(4r1) = 3.75 % L4 = 0.13 % Using the liquidity premium theory, determine the current (long-term) rates. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Based on economists’ forecasts and analysis, 1-year Treasury bill rates and liquidity premiums for the next four years are expected to be as follows: R1 = 2.00 % E(2r1) = 2.90 % L2 = 0.06 % E(3r1) = 3.30 % L3 = 0.08 % E(4r1) = 3.75 % L4 = 0.13 % Using the liquidity premium theory, determine the current (long-term) rates. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Years Current (Long-term) Rates 1 % 2 % 3 % 4 %
Based on economists’ forecasts and analysis, 1-year Treasury bill rates and liquidity premiums for the next four years are expected to be as follows: R1 = 0.90 % E(2r1) = 2.05 % L2 = 0.09 % E(3r1) = 2.15 % L3 = 0.12 % E(4r1) = 2.45 % L4 = 0.14 % Using the liquidity premium theory, determine the current (long-term) rates. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
What was the average annual rate of return on 3-month U.S. Treasury bills during the period 1990 to 2014? Select one: O a. 2.15% O b. 4.23% O c. 5.68% O d. 3.04%
In October 2008, six-month (182-day) Treasury bills were issued at a discount of 1.42%. What was the annual yield? Assume 365 days in a year. (Do not round intermediate calculations. Enter your answer as a percent rounded to 3 decimal places.)
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.)
Give typing answer with explanation and conclusion "One-year Treasury bills currently earn 2.35% and you expect that one year from now, 1-year Treasury bill rates will increase to 2.61% and that two years from now, one-year Treasury bill rates will increase to 3.11%; If the unbiased expectations theory is correct, what should the current rate be on a three-year Treasury security?" one year is 14.6% what is it in decimal form
Why has the current 10-yr US Treasury changed from 2.79% in August to 3.51% now? Why is it increasing?
Using the Treasury yield information in part c, calculate the following rates using geometric averages (round your answers to three decimal places): The 1-year rate, 1 year from now The 5-year rate, 5 years from now The 10-year rate, 10 years from now The 10-year rate, 20 years from now