Questions A, B, C, D, and E

What is the present value of a security that will pay $28,000 in 20 years if securities of equal risk pay 8% annually? Do not round intermediate calculations. Round your answer to the nearest cent. Your parents will retire in 22 years. They currently have $390,000 saved, and they think they will need $1,150,000 at retirement. What annual interest rate must they earn to reach their goal, assuming they don't save any additional funds? Round your answer to two decimal places. lim% Interest rates on 4-year Treasury securities are currently 5.4%, while 6 -year Treasury securities yield 7.05%. If the pure expectations theory is correct, what calculations. Round your answer to two decimal places. % Due to a recession, expected inflation this year is only 3.25%. However, the inflation rate in Year 2 and thereafter is expected to be constant at some level above 3.25%. Assume that the expectations theory holds and the real risk-free rate (r) is 2.5%. If the yield on 3 -year Treasury bonds equals the 1 -year yield plus 0.5%, what inflation rate is expected after Year 1 ? Round your answer to two decimal places. % A company's 5 -year bonds are yielding 7% per year. Treasury bonds with the same maturity are yielding 4.9% per year, and the real risk-free rate ( r ) is 2.95%. The average inflation premium is 1.55%, and the maturity risk premium is estimated to be 0.1(t1)%, where t= number of years to maturity. If the liquidity premium is 0.8%, what is the default risk premium on the corporate bonds? Round your answer to two decimal places. %