Calculate the expected one-year interest rate one year

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1. Suppose the current one-year interest rate is 2.5% and the two-year interest rate is 3.5%. Calculate the expected one-year interest rate one year from now. (Enter percentages as decimals and round to 4 decimals;

2. Suppose you are given the following bond quote information: Term: 7-years Price: $1,125.50 Coupon Rate: 8% Par value: $1,000 Assume the bond makes semi-annual payments, calculate the yield-to-maturity for the bond. (Enter percentages as decimals and round to 4 decimals)

3. Amy Monroe wants to create a fund today that will enable her to withdraw $26,200 per year for 7 years, with the first withdrawal to take place 5 years from today.

If the fund earns 8% interest, how much must Amy invest today?

Investment amount$_____________

Reference no: EM131892062

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