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Solutions to Quiz #5 - Macroeconomic Analysis | FIN 30220, Quizzes of Introduction to Macroeconomics

Material Type: Quiz; Professor: Stiver; Class: Macroeconomic Analysis; Subject: Finance; University: Notre Dame; Term: Spring 2011;

Typology: Quizzes

2010/2011

Uploaded on 05/17/2011

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Download Solutions to Quiz #5 - Macroeconomic Analysis | FIN 30220 and more Quizzes Introduction to Macroeconomics in PDF only on Docsity! Finance 30220 Quiz #5 Name_______________________ Section_________ 1) Consider the following data: Date 1 Year T-Bill Yield (BEY) Consumer Price Index Dec 2004 2.43% 191.7 Dec 2005 4.18% 198.2 Dec 2006 4.88% 206.3 Dec 2007 3.23% 211.68 Dec 2008 .26% 211.49 a) Assuming a zero liquidity premium, construct a yield curve for 2006. (i.e. calculate three spot rates). %88.41 =i ( )( )[ ] %05.40405.10323.10488.1 22 1 =⇒= i ( )( )( )[ ] %77.20277.10026.10323.10488.1 33 1 =⇒= i b) Calculate the 2008 price of a $1,000, 180 day T-Bill. (Assume that the annualized 180 Day T-Bill rate is the same as the current 1 year Treasury yield). First, we need the 180 day (1/2 year interest rate) .26/2 = .13 Now, 70.998$ 0013.1 1000$ =
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