a) Assume that the nominal return on U.S. government T-bills was 10% during 2002, when the rate of inflation was 6%. The real risk-free rate of return on theseT-bills was:      b) When individuals believe they have sufficient income and assets to cover their expenses while maintaining a reserve for uncertainties, they are most likely in the phase of the investment life cycle. gifting B. consolidation C. accumulation D. spending  c) Find the duration of a 3-year bond with annual coupon payments of $80 and a par value of $1,000. The current market price of the bond is $950.25. If the YTM of the bond dropped by 1%, what would happen to the bond price?

Q: Assume a consumer has current-period income y=200, future-period income y'=150, current and future…

A: Given information Current income  Y=200 Future income Y'=150 Current tax t=40 Future tax t'=50…

Q: Expected Interest Rate The real risk-free rate is 2.1%. Inflation is expected to be 2.35% this year,…

A: Interest rate is the amount charged over and above the principal amount by the lender from the…

Q: Fiscal sales plan is $450,000,000 Fiscal GM% plan = 45%   Goal is to increase GM $ by 4 million…

A: The objective of the question is to calculate the new Gross Margin (GM) percentage needed to achieve…

Q: Given the following informations; Consumption(C) 800+0.9Y, Where Y-Income Investment (I) =8000-800r,…

A: In an economy, there is a connection between goods market and money market, which is explained by…

Q: Suppose two factors are identified for the U.S. economy: the growth rate of industrial production,…

A: The CAPM two-factor model is employed when there are two or more factors that need to be taken into…

Q: Real interest rates can be negative.  True  False

A: The real interest rate is the inflation adjusted interest rate. That is, inflation implies that real…

Q: (1) Suppose you just bought a treasury bill for $965 that matures in three months (91 days), and has…

A: ***Since the student has posted multiple questions, hence, the expert is required to solve only the…

Q: Suppose that on January​ 1, ​2023, the price of a​ one-year Treasury bill with a face value of…

A: Nominal Interest rate (Yield to maturity): The nominal interest rate is the stated interest rate on…

Q: Suppose that the one-year interest rate in Australia is 7.66% p.a. and in New Zealand, it is 8.63%…

A: One-year interest rate:In Australia = 7.66%In New Zealand =…

Q: What impact will a decrease in investor confidence have on the Market for Loanable Funds? A)…

A: The market where there is occurence of borrowing and lending of loanable funds is called the market…

Q: The real risk-free rate is 3.05%. Inflation is expected to be 3.15% this year, 5% next year, and…

A: Inflation is the rate of increase in prices over a given period of time. Here, we calculate the…

Q: IS: Y= C = 800+ 0.8(Y-T) I = 900-50r NX = 500 - 50€ M/P = Y-125r G = 500 T = 500 M = 6000 P = 3 r* =…

A: In economics, "IS" and "LM" refer to two curves that represent the equilibrium conditions in the…

Q: Assume that the real risk-free rate is r* = 2% and the average expected inflation rate is 3% for…

A: Introduction A bond is a debt security that resembles an IOU. Borrowers create bonds to get money…

Q: An economy has full-employment output of 6,000. Government purchases, G, are 1,000. Desired…

A: National saving can be thought of as the amount of remaining income that is not consumed, or spent…

Q: Suppose Emma owns an investment portfolio. Last year, she earned a 3.65% portfolio return. During…

A: answer is given below

Q: Rate of Return 1. If a bond has a current yield of 6% and a rate of return of 2%, it has a capital…

A: The rate of return is a metric used to calculate an investment's profit or loss over time.A rate of…

Q: Let's say we expect the inflation rate to be 7 percent in a year, 5 percent in two years and 3…

A: We are going to use fisher identity to answer this question.

Q: You decide to lend your sister, who has never defaulted on a loan (ie. ρd =0), $1000 for one year.…

A: At the end of the year she gets $1050 (which includes the loan). Loan given to sister was of $1000.…

Q: Years remaining to Maturity 6% p.a. 6% p.a. BOND A Coupon rate = 8% p.a. Market interest rate = BOND…

A: Introduction:

Q: Consumer's utility function for consumption levels in two periods, c and ca2, is min(2c1, c). The…

A: Given information Two period consumption C1 and C2 Utility function Min(2C1,C2) Interest =r First…

Q: According to Say's law, funds (money) saved must give rise to an equal amount of funds (money)…

A: The Say's law signifies that the production of one or more good is interdependent. If the economy…

Q: When interest rates rise, what needs to happen in order for the present value of an asset to remain…

A: Interest rate : The percentage of the amount borrowed or invested, representing the cost of money or…

Q: In the country of Winterfell, the velocity of money is constant. GDP growth is 4% per year, the…

A:

Q: if consumers' disposable income increases due to a permanent tax cut - isn't it correct to say that…

A: The question is asking about the impact of a permanent tax cut on consumers' disposable income,…

Q: market securities. This difference even larger when the economy is ____

A: Treasury bills are zero-coupon bonds which implies that no interest is being paid on them to…

Q: Suppose you have $100 to invest. You can hold it in cash, you can deposit it in some savings account…

A: Part 1 Option D is correct. The share of capital in the production function is estimated by…

Q: Interest rates and bond prices vary directly during inflation and inversely during recessions. 1)…

A: Interest rate: - it is the percentage charge on the principal amount by a lender to a borrower.

Q: A bond is a legal promise to repay a debt Each bond specifies -(), the amount originally lent, -(),…

A: A bond refers to debt instrument that makes periodic payments of interest, termed to be the coupons,…