(a) Identify ONE factor that affect demand and supply of loanable fund in the U.S. respectively...

  

Transcribed Image Text:

(a) Identify ONE factor that affect demand and supply of loanable fund in the U.S. respectively under global widespread of COVID-19 and explain their corresponding effect on interest rate in the U.S.. (6 marks) (b) The following information shows the interest rates with different maturities observed today: Maturity (Years) Rates 1 4.75% 2 5.00% 3 4 5.30% 5.65% Calculate (i) 1-year forward rate in year 2 and (i) 2-year forward rate in year 3 based on Unbiased Expectation Theory. (2 marks) Activate Wir (a) Identify ONE factor that affect demand and supply of loanable fund in the U.S. respectively under global widespread of COVID-19 and explain their corresponding effect on interest rate in the U.S.. (6 marks) (b) The following information shows the interest rates with different maturities observed today: Maturity (Years) Rates 1 4.75% 2 5.00% 3 4 5.30% 5.65% Calculate (i) 1-year forward rate in year 2 and (i) 2-year forward rate in year 3 based on Unbiased Expectation Theory. (2 marks) Activate Wir