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##### Suppose the real rate is 7.34% and the inflation rate is 5.73%. Solve for the nominal rate.

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**Question**

Suppose the real rate is 7.34% and the inflation rate is 5.73%. Solve for the nominal rate. Use the Fisher Effect formula.;Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.;1 points;Question 2;Suppose the real rate is 3.17% and the nominal rate is 11.4%. Solve for the inflation rate. Use the Fisher Effect equation.;Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.;1 points;Question 3;Suppose the nominal rate is 9.58% and the inflation rate is 3.15%. Solve for the real rate. Use the Fisher Effect formula.;Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.;1 points;Question 4;ABC wants to issue 23-year, zero coupon bonds that yield 10.25 percent. What price should they charge for these bonds if they have a par value of $1,000? That is, solve for PV. Assume annual compounding.;Hint: zero coupon bonds means PMT = 0;Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.;1 points;Question 5;A premium bond is a bond that;has a market price which exceeds the face value.;is callable within 12 months or less.;is selling for less than par value.;has a face value in excess of $1,000.;has a par value which exceeds the face value.;1 points;Question 6;The yield to maturity on a Marshall Co. premium bond is 7.6 percent. This is the

Paper#25093 | Written in 18-Jul-2015

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