We see the following yield curve for discount, or zero-coupon, bonds.

maturity yield to maturity
1 year 6%
2 years 7%
3 years 8%

(a) if the fair price for a four-year annuity paying $100 per year is $334.57, what is the yield to maturity on a four-year zero-coupon bond?
(b) suppose that you wish to lock in a loan in year 2 to be repaid in year 3 (cash received in year 2 and interest plus principal returned in year 3). the amount of the loan is $20 million. what pattern of discount bond holdings could you use to construct this loan now?

John f. kennedy believed that a leader should be elected successful a lifelong student in the military

Assume that the following conditions exist: a. all banks are fully loaned up- there are no excess reserves, and desired excess reserves are always zero. b. the money multiplier is 5 .     c. the planned investment schedule is such that at a 4 percent rate of interest, investment =$1450 billion. at 5 percent, investment is $1420 billion. d. the investment multiplier is 3 . e.. the initial equilibrium level of real gdp is $12 trillion. f. the equilibrium rate of interest is 4 percent now the fed engages in contractionary monetary policy. it sells $1 billion worth of bonds, which reduces the money supply, which in turn raises the market rate of interest by 1 percentage point. calculate the decrease in money supply after fed's sale of bonds: $nothing billion.

Suppose that real interest rates increase across europe. this development will u.s. net capital outflow at all u.s. real interest rates. this causes the loanable funds to because net capital outflow is a component of that curve.