Compute the two-year nominal interest rate using the exact formula and the approximation formula for each set
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Compute the two-year nominal interest rate using the exact formula and the approximation formula for each set of assumptions listed in parts a through \(c\).
a. \(i_{t}=2 \% ; i_{t+1}^{e}=3 \%\)
b. \(i_{t}=2 \% ; i_{t+1}^{e}=10 \%\)
c. \(i_{t}=2 \% ; i_{t+1}^{e}=3 \%\). The term premium on a two-year bond is \(1 \%\).
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QUATERNARY Pursuing M.Tech.(2017-2019) in Electronics and Communication Engg. (VLSI DESIGN) from
GNIOT Greater Noida
TERTIARY B.Tech. (2012-2016) in Electronics and Communication Engg. from GLBITM Greater Noida
SECONDARY Senior Secondary School Examination (Class XII) in 2012 from R.S.S.Inter College, Noida
ELEMENTARY Secondary School Examination (Class X) in 2010 from New R.J.C. Public School ,Noida
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