3 years ago

Changes in the PPI can predict changes in the consumer price index because

Business

1 answer:

Lelu [443]3 years ago

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Producers often pass along price increases to customer.

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Suppose the interest rate on a 1-year T-bond is 5.00% and that on a 2-year T-bond is 7.00%. Assume that the pure expectations th

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Answer: 9.04%

Explanation:

1 year rate today = 5% = 0.05

2 years rate today = 7% = 0.07

Maturity of longer bond = 2

The ending return if the 2 years bond are bought will be thesame as the needed return on series of a year bond which will be 1.1449

The market's forecast for 1-year rates 1 year from now will be calculated as:

= 1.05(1+X) = 1.1449

1.05 + 1.05X = 1.1449

1.05X = 1.1449 - 1.05

1.05X = 0.0949

X = 0.0949/1.05

X = 0.090381

X = 9.04%

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Trade Surplus and positive net Capital flow

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Scenario 1: Richman Investments provides high-end smartphones to 250 of their 3000 employees. The value of each smartphone is $1

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will be 500

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A bond had a price of $946.72 at the beginning of the year and a price of $983.73 at the end of the year. The bond's par value i

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Match each of the terms below with their definitions and descriptions

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The answer is B :)))

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