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using a BA II calculator.

Please show step by step, how to solve with finance questions with a BA-II calculator

The 2 Questions and Answers are below.
Please show me how to get the answer using a BA II calculator. Please explain steps in simple form:

3. Average inflation
Suppose that the annual expected rates of inflation over each of the next five years are 5 percent, 6 percent, 9 percent, 13 percent, and 12 percent, respectively. What is the average expected rate of inflation over the 5-year period?

Real risk-free rate of interest
4. You read in The Wall Street Journal that 30-day T-bills are currently yielding 8 percent. Your brother-in-law, a broker at Kyoto Securities, has given you the following estimates of current interest rate preĀ¬miums:

Inflation premium 5%
Liquidity premium 1%
Maturity risk premium 2%
Default risk premium 2%

Based on these data, the real risk-free rate of return is

Solution Preview

3. Average inflation

Suppose that the annual expected rates of inflation over each of the next five years are 5 percent, 6 percent, 9 percent, 13 percent, and 12 percent, respectively. What is the average expected rate of inflation over the 5-year period?
Answer = 9%

You have to find the average expected rate of inflation over ...

Solution Summary

This solution is comprised of a detailed explanation to answer how to solve with finance questions with a BA-II calculator.

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