Question: IV. Compute the two-year nominal interest rate using the exact formula and the approximation formula for each set of assumptions listed in (a) through (c).

IV. Compute the two-year nominal interest rate using the exact formula

IV. Compute the two-year nominal interest rate using the exact formula and the approximation formula for each set of assumptions listed in (a) through (c). a. i.-296; 1.1-3% b. t = 2%, in 1-10% C. t-2%, ie+1-396. The term premium on a two-year bond is 196. t+1

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