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
Problem 1PS
Related questions
Question
100%
Today is January 2, 2022, and investors expect the annual nominal risk-free interest rates in 2022 through 2024 to be:
| Year | One-Year Rate (rRF) | |
| 2022 | 2.7 | % |
| 2023 | 1.9 | |
| 2024 | 3.8 |
Assume the bonds have no risks.
-
What is the yield to maturity for Treasury bonds that mature at the end of 2023 (a two-year bond)? Round your answer to one decimal place.
__________ %
-
What is the yield to maturity for Treasury bonds that mature at the end of 2024 (a three-year bond)? Round your answer to one decimal place.
__________ %
![Today is January 2, 2022, and investors expect the **annual nominal risk-free interest rates** in 2022 through 2024 to be:
| Year | One-Year Rate (r_RF) |
|------|---------------------|
| 2022 | 2.7% |
| 2023 | 1.9% |
| 2024 | 3.8% |
Assume the bonds have no risks.
a. What is the yield to maturity for Treasury bonds that mature at the **end of 2023** (a two-year bond)? Round your answer to one decimal place.
[Input box] %
b. What is the yield to maturity for Treasury bonds that mature at the **end of 2024** (a three-year bond)? Round your answer to one decimal place.
[Input box] %](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb23e2c4f-efaa-417a-9351-1cf888c16925%2F294fa093-693f-4375-b5c1-ae7b18f42eaa%2Fj45he6l_processed.png&w=3840&q=75)
Transcribed Image Text:Today is January 2, 2022, and investors expect the **annual nominal risk-free interest rates** in 2022 through 2024 to be:
| Year | One-Year Rate (r_RF) |
|------|---------------------|
| 2022 | 2.7% |
| 2023 | 1.9% |
| 2024 | 3.8% |
Assume the bonds have no risks.
a. What is the yield to maturity for Treasury bonds that mature at the **end of 2023** (a two-year bond)? Round your answer to one decimal place.
[Input box] %
b. What is the yield to maturity for Treasury bonds that mature at the **end of 2024** (a three-year bond)? Round your answer to one decimal place.
[Input box] %
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