1. The interest rate is 8.7% p.a. effective and the rate of inflation is 1% p.a. Compute the real rate of interest 数字 % Enter a percentage correct to 2 decimal places. 2. A Zero-Coupon Bond, with face value £100, that reaches maturity in 5 years sells for £75. The inflation rate is 1% p.a. effective. What is the real yield? 数字 % Enter a percentage correct to 2 decimal places.

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
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1. The interest rate is 8.7% p.a. effective and the rate of inflation is 1% p.a.
Compute the real rate of interest
数字
%
Enter a percentage correct to 2 decimal places.
2. A Zero-Coupon Bond, with face value £100, that reaches maturity in 5 years sells for £75. The inflation rate is 1% p.a. effective.
What is the real yield?
数字
%
Enter a percentage correct to 2 decimal places.
Transcribed Image Text:1. The interest rate is 8.7% p.a. effective and the rate of inflation is 1% p.a. Compute the real rate of interest 数字 % Enter a percentage correct to 2 decimal places. 2. A Zero-Coupon Bond, with face value £100, that reaches maturity in 5 years sells for £75. The inflation rate is 1% p.a. effective. What is the real yield? 数字 % Enter a percentage correct to 2 decimal places.
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