View PoliciesCurrent Attempt in ProgressHow strong is the correlation between the inflation rate and 30-year U.S. Treasury yields? The following data published by FujiSecurities are given as pairs of inflation rates and Treasury yields for selected years over a 35-year period.Inflation Rate30-Year TreasureYield1.57%3.05%2.233.932.074.684.536.577.258.279.2512.085.1210.274.628.45Compute the Pearson product-moment correlation coefficient to determine the strength of the correlation between these twovariables. Comment on the strength and direction of the correlation.(Round the intermediate values to 4 decimal places. Round your answer to 3 decimal places.)r =There is aeTextbook and MediaSave for Laterbetween the inflation rate and the thirty-year treasury yield.SUPPORT

This coefficient measures the linear correlation between two variables, providing a value between -1…

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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

Section: Chapter Questions

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Annual and Average Returns for Stocks, Bonds, and T-Bills, 1950 to 2019 Long-Term Treasury Bonds 6.6% 0.0 1.6 5.7 13.5 9.5 8.0 9.4 1950 to 2019 Average 1950 to 1959 Average 1960 to 1969 Average Average Average Average 1970 to 1979 1980 to 1989 1990 to 1999 2000 to 2009 2010 2011 Annual Return 2012 Annual Return 2013 Annual Return 2014 Annual Return 2015 Annual Return 2016 Annual Return 2017 Annual Return 2018 Annual Return 2019 Annual Return 2010 to 2019 Average 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Average Average Annual Return Standard deviation Portfolio Return % % % % % % % % % % % Stocks 12.7% % 20.9 8.7 7.5 18.2 19.0 0.9 15.1 2.1 16.0 32.4 13.7 1.4 12.0 21.8 -4.4 31.5 14.2 29.9 3.6 -12.7 25.1 -1.2 You have a portfolio with an asset allocation of 50 percent stocks, 36 percent long-term Treasury bonds, and 14 percent T-bills. Use these weights and the returns given in the above table to compute the return of the portfolio in the year 2010 and each year since. Then…
Liquidity Premium Hypothesis Based on economists' forecasts and analysis, one-year Treasury bill rates and liquidity premiums for the next four years are expected to be as follows: R1 = 7.60% E(r2) = 8.70% L2 = 1.05% E(r3) = 8.80% L3 = 1.15% E(r4) = 9.10% L4 = 1.20% Using the liquidity premium hypothesis, what is the current rate on a four-year Treasury security?
am. 48.
Please answer the correct calculation please ASAP Don't answer by pen paper
Term in years: Rate: 1 2 3 4 5 1.8% 2.25% 2.30% 2.66% 3.13% The table above shows the interest rates available from investing in risk-free U.S. Treasury securities with different investment terms. What is the present value (PV) of cash flows from an investment that yields $5,000 at the end of each year for the next four years? OA. $22,639 OB. $15,093 OC. $18,866 OD. $26,412
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Liquidity Premium Hypothesis Based on economists' forecasts and analysis, one-year Treasury bill rates and liquidity premiums for the next four years are expected to be as follows: R1 = 7.20% E(r2) 8.30% L2 .65% %3D E(r3) = 8.40% L3 = .75% E(r4) = 8.70% L4 = .80% Using the liquidity premium hypothesis, what is the current rate on a four-year Treasury security?
es Based on economists' forecasts and analysis, one-year T-bill rates and liquidity premiums for the next four years are expected to be as follows: 1R1 E(271) = .84% E(371) = .94% E(471) = 1.24% = .47% Year 1 Year 2 Year 3 Year 4 42 = 0.07% 43 L4 = 0.17% = 0.14% Identify the four annual rates. (Round your answers to 2 decimal places. (e.g., 32.16)) Annual Rates oto oto oto oto % % % %
Unbiased Expectations Theory Suppose that the current one-year rate (one-year spot rate) and expected one-year T-bill rates over the following three years (i.e., years 2, 3, and 4, respectively) are as follows 1R1=4.35%, E(2r1) =5.35%, E(3r1) =5.85%, E(4r1)=6.20% Using the unbiased expectations theory, what is the current (long-term) rate for four-year-maturity Treasury securities?
Currently, 3-year Treasury securities yield8.7%,7-year Treasury securities yield8.4%, and 10 -year Treasury securities yield8.2%. If the expectations theory is correct, what does the market expect will be the yield on 3-year Treasury securities seven years from today? 8.13%8.33%7.73%7.53%7.93%
Consider the following information on different asset classes from 1926 through 2020. Arithmetic Mean 12.2% 16.2 6.5 6.1 5.3 3.3 2.9 Series Large-company stocks Small-company stocks Long-term corporate bonds Long-term government bonds Intermediate-term government bonds U.S. Treasury bills Inflation a. What is the real return on long-term government bonds? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. b. What is the real return on long-term corporate bonds? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. a. Real return b. Real return % %
Suppose today that you have the following information: yield on 10-year TIPS: 3.5% yield on 10-year Treasury note: 3.0% What is the expected annual rate of inflation (approximate) over the next 10 years?

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