chapter eight problem 8 Inflation and Nominal Returns- Suppose the real rate is 2.5 percent and the inflation rate is 4.7 percent. Whate rate would you expect to see on a treasury bill? Problem 14 Interest Rate- laurel, Inc and Hardy Corp. both have 8 percent coupon bonds oustanding, with semiannual interest payments, and both are priced at par value. the Laurel, Inc bond has 2 years to maturity, where as the Hardy Corp. bond has 15 years to maturity. If interest rates suddenly rise by 2 percent, what is the percentage change inthe price of these bonds? If interest rates were to suddenly fall by 2 percent instead, what would the perventage change in the prive of these bonds be then? Illustrate your answeres by graphing bond prices versus YTM. what does thisproblem tell you about the interest rate risk of longer-term bonds? P