Interest Rate For A 12 Year Bond Paper Homework Help

Consider the following: today’s interest rate for a 12-year bond is 7%; today’s interest rate for a 4-year bond is 4%; the interest rate for a 4-year bond, expected in 4 years is 5%. Find the interest rate for a 4-year bond expected in 8 years. The interest rate on the 12 year bond carries a .5% liquidity premium. Use the arithmetic or simple average approach. Make sure to express your answers as a percentage. Round your answers to the nearest 100th decimal point.

Consider the following: today’s interest rate for a 12-year bond is 7%; today’s interest rate for a 4-year bond is 4%; the interest rate for a 4-year bond, expected in 4 years is 5%. Find the interest rate for a 4-year bond expected in 8 years. The interest rate on the 12 year bond carries a .5% liquidity premium. Use the arithmetic or simple average approach. Make sure to express your answers as a percentage. Round your answers to the nearest 100th decimal point.