You buy a lump sum note $($bill of exchange$).$ The nominal value is $10$ million. ISK and the maturity date is $12$ years from now. The yield at which you buy the bill is $8\mathrm{.}1\%.$ How much do you pay for the bill?

b$)$ If you sell the promissory note $($from point a$)$ after $4$ years at a yield of $6\mathrm{.}9\%,$ what annual nominal yield have you achieved during these $4$ years?

c$)$ If the consumption index went from $557$ to $725$ during the $4$ years you had the bill $($from points a and b$),$ what is your annual real return?

Answer rating: 100% (QA)

a To calculate how much you pay for the 10 million ISK bill with a maturit... View the full answer