1. The interest rate is 9.5% p.a. effective and the rate of inflation is 5.2% p.a. Compute the real rate of interest % Enter a percentage correct to 2 decimal places. 2. A Zero-Coupon Bond, with face value £100, that reaches maturity in 7 years sells for £66. The inflation rate is 5% p.a. effective. What is the real yield? % Enter a percentage correct to 2 decimal places.
1. The interest rate is 9.5% p.a. effective and the rate of inflation is 5.2% p.a. Compute the real rate of interest % Enter a percentage correct to 2 decimal places. 2. A Zero-Coupon Bond, with face value £100, that reaches maturity in 7 years sells for £66. The inflation rate is 5% p.a. effective. What is the real yield? % Enter a percentage correct to 2 decimal places.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:1. The interest rate is 9.5% p.a. effective and the rate of inflation is 5.2% p.a.
Compute the real rate of interest
%
Enter a percentage correct to 2 decimal places.
2. A Zero-Coupon Bond, with face value £100, that reaches maturity in 7 years sells for £66. The
inflation rate is 5% p.a. effective.
What is the real yield?
%
Enter a percentage correct to 2 decimal places.
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