Calculate the nominal rate of interest for a new bond that will mature in 10 years assuming
Question:
Calculate the nominal rate of interest for a new bond that will mature in 10 years assuming the following bond characteristics and market risks:
a. Three-month T-bill rate of 4 percent
b. Anticipated yearly inflation of 3 percent
c. Low or no chance of default
d. A premium of 0.25 percent for every year until maturity
e. No liquidity premium
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Given the information youve provided we can break down the calculation into three parts Real RiskFre...View the full answer
Answered By
Simon kingori
I am a tier-one market researcher and content developer who has been in this field for the last six years. I’ve run the freelancing gamut; from market research, data mining and SEO/SMM to copywriting, Content Development, you name it, I’ve done it. I’m extremely motivated, organized and disciplined – you have to be to work from home. My experience in Freelancing is invaluable- but what makes me a cut above the rest is my passion to deliver quality results to all my clients- it’s important to note, I've never had a dissatisfied client. Backed by a Masters degree in Computer Science from MOI university, I have the required skill set and burning passion and desire to deliver the best results for my clients. This is the reason why I am a cut above the rest. Having taken a Bsc. in computer science and statistics, I deal with all round fields in the IT category. It is a field i enjoy working in as it is dynamic and new things present themselves every day for research and exploration.
1+ Reviews
10+ Question Solved
Related Book For 
Question Posted:
