Question: I NEED SOLVED solution [Yield To Maturity and Real Interest Rate] Suppose a project costs $1000 to invest and generates a cash flow of $400

I NEED SOLVED solution

[Yield To Maturity and Real Interest Rate] Suppose a project costs $1000 to invest and generates a cash

flow of $400 in the first year, $400 in the second year, $200 in the third year and $300 in the fourth year.

(a) Compute the yield to maturity of this project.

(b) Suppose the expected inflation rate in the next four years is 2%. What is the real interest rate implied by

the project?

(c) Suppose the expected inflation rate is 2% for the first year, 3% for the second year, 1% for the third year

and 3% for the fourth year. What is the real interest rate implied by this project?

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