Question: need this all answered (its all one question) For example, if you know that the real rate of interest is 5% and it is expected

need this all answered (its all one question)

you know that the real rate of interest is 5% and it

expected to be 1.60% next year, 3.60% the following year, and 4.70%

For example, if you know that the real rate of interest is 5% and it is expected to remain constant for the next 3 years, inflation is expected to be 1.60% next year, 3.60% the following year, and 4.70% the third year, then the average expected inflation rate over the next three years is 3160x+3cosx+470x=3.30%. If also you can estimate that the maturity risk premium is 0.1(t1)%, where t is number of years to maturity, then the yield on a 1-year Treasury bill, which has neither default risk premium nor liquidity risk premium, is as follows: m=r2+IP1+MRP1=5%+1.60%+0.1(11)%=6.60% Complete the following table by calculating vields on a 2- and 3-year Treasury bilis, respectively. Unike Treasury securities, corporate bonds have both a defoult risk premium and a liquidity risk premium. Suppose that the liquidity premium on 3-year bonds is LP=0.35%, and the defouit risk premlum on 3-year bonds is DRP=1.30%. The formula for calculating the yield on a corporate bond is Unlike Treasury securities, corporate bonds have both a default risk premium and a liquidity risk premlum. Suppose that the liquidity premium on 3-year bonds is LP=0.35%, and the default risk premium on 3 -year bonds is DRP=1.30%. The formula for calculating the yield on a corporate bond is rnop=r+IP+DRP+LP+MRPreop=IP+LP+MRPrcop=r+IP+LP+MRPrceop=IP+DRP+LP+MRP The yleid on a 3-year corporate bond is Suppose the real risk-free rate of interest is r=5% and it is expected to remain constant over time. Inflation is expected to be 1.60% per year for the next two years and 3.60% per year for the next three years. The maturity risk premlum is 0.1(t1)%, where t is number of years to maturity, a liquidity premium is 0.35%, and the default risk premium for a corporate bond is 1.30%. The average inflation during the first 4 years is What is the yield on a 4-year Treasury bond? 7.90%5.30%7.60%9.55% What is the yield on a 4-year BBB-rated bond? 8.25% 7.90% 9.55% 9.204 It the vieid on a 5 -year Treasury bond is 8.20% and the yield on a 6 -year Treasury bond is 8.62%, the expected inflation in 6 years is (Hint: Do not round intermediate calculations.) Now it's time for you to practice what you've leamed. Suppose the real risk-free rate of interest is r=5% and it is expected to remain constant over time. Inflotion is expected to be 1,60% per year for the next 3 years and 3.60% per year for the next 5 years, The maturity risk premium is 0.1(t1)%, where t is number of years to maturity, a liquidity premium is 0.35%, and the default risk premium for a corporate bond is 1.30%. Complete the following table by calculating yields on Treasury and corporate bonds of various moturity

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