Money and Banking ( In Table 5.5, show the derivation of each of the following entries: ) - 19304

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Money & Banking (Numerical Exercise Solution)[Calculated All 3 year Interest rate of 2011,2014,2018



In Table 5.5, show the derivation of each of the following entries:

a. The interest rate of 5.1 percent on a bond sold in 2011 that matures in 7 years.

 b. The interest rate of 4.4 percent on a bond sold in 2014 that matures in 5 years.

c. The interest rate of 4.5 percent on a bond sold in 2018 that matures in 2 years

 

 

Table 5.5 is as following

Date 1 2 3 4 5 6 7 8 9 10

2011 5.0, 5.5 6.0 6.0 5.8 5.5 5.1 5.0 5.0 5.1

2012 6.0 6.5 6.3 6.0 5.6 5.2 5.0 5.0 5.1

2013 7.0 6.5 6.0 5.5 5.0 4.8 4.9 5.0

2014 6.0 5.5 5.0 4.5 4.4 4.5 4.7

2015 5.0 4.5 4.0 4.0 4.2 4.5

2016 4.0 3.5 3.7 4.0 4.4

2017 3.0 3.5 4.0 4.5

2018 4.0 4.5 5.0

2019 5.0 5.5

 

2020 6.0

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