In January 2010, the U.S. Treasury issued a $1000 par, ten-year, inflation-indexed note with a coupon of 4%. On the date of issue, the consumer price index (CPI) was 150. By January of the next year, the CPI had increased to 250. What is the coupon payment that is made in January of that next year?
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In January 2010, the U.S. Treasury issued a $1000 par, ten-year, inflation-indexed note with a coupon of 4%. On the date of issue, the consumer price index (CPI) was 150. By January of the next year, the CPI had increased to 250. What is the coupon payment that is made in January of that next year?
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- On October 20, 2010, the 8 year treasury note has a bid price of 99:18, and an ask price of 99:20. The treasury note has a face value of $10,000, and a coupon rate of 5% made semiannually. The treasury note matures on October 19, 2015. What is the ask yield-to-maturity?In May 2000, the U.S. Treasury issued 30-year bonds with a coupon rate of 6.25%, paid semi-annually. A bond with a face value of $1,000 pays $31.25 (1,000 × 0.0625 / 2) every six months for the next 30 years; in May 2030, the bond also repays the principal amount, $1,000. 1. What is the value of the bond if, immediately after issue in May 2000, the 30-year interest rate increases to 7.5%? 2. What is the value of the bond if, immediately after issue in May 2000, the 30-year interest rate decreases to 5.0%? 3. On a graph in Excel, show how the value of the bond changes as the interest rate changes (plot the value as a function of the interest rate). At what interest rate is the value of the bond equal to its face value of $1,000?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…
- Treasury notes and bonds. Use the information in the following table: . What is the price in dollars of the February 2001 Treasury note with semiannual payment if its par value is $100,000? What is the current yield of this note? Treasury note is a U.S. government bond with a maturity of between two and ten years. Par value is the principal amount to be repaid at the maturity of the bond. Current yield is the annual bond coupon payment divided by the current price.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?Today in the United States, the interest rate on 10-year government bonds was 1.65%, and the interest rate on 10-year TIPS was -0.51%. Today, what can be estimated to be the real interest rate on 10-year government bonds and the expected inflation rate for the next 10 years?
- 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 %…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.Suppose that today is October 30th, 2021. A US Treasury bond was issued four months ago, i.e. on June 30th, 2021, with the following characteristics. It will pay back a par value of 1,000 USD two years after the issuance date, and it also pays coupons calculated with an annual coupon rate of 6.3%. The annual interest rate is constant at 4%. Assume that every month is made of 30 days. a. What is the value of the interest rate that you decide to use to price such a bond? If it is already available in the exercise, just report it. If it is not available, compute it. b. Compute the current price of this bond, which you will read on the Wall Street Journal, as of October 30th, 2021. Please clearly list as b1, b2, b3 etc, all the steps in your solution.
- A recent edition of the Wall Street Journal reported interest rates of 2.5%, 2.80%, 3.0%, and 3.25% for the three-year, four-year, five-year, and six-year Treasury note yields, respectively, According to the unbiased expectation theory of the term structure of interest rates, what are the expected one-year rate during years 4 and 5?Suppose the following table shows yields to maturity of U.S. Treasury securities as of January 1, 2000. Based on the data in the table, calculate the implied forward one-year and two-year rates at January 1, 2002. y1=3.0% y2=3.5% y3=4.0% y4=4.5%In 1999, the Office of the Under Secretary of Defense projected that the ENR Building Cost Index (BCI) would increase from its 1999 value of 3423 to 4098 in 2012. If the actual value in 2012 was 5167, what was the difference between the projected and actual BCI annual inflation rates from 1999 to 2012?