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    Money & Banking

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    In Table 5.5, show the derivation of each of the following entries:

    a The interest rate of 5.1 percent on a bond sold in 2011 that matures in 7 years.

    b The interest rate of 4.4 percent on a bond sold in 2014 that matures in 5 years.

    c The interest rate of 4.5 percent on a bond sold in 2018 that matures in 2 years.

    Table 5.5 is as following:

    Date 1 2 3 4 5 6 7 8 9 10
    2011 5.0 5.5 6.0 6.0 5.8 5.5 5.1 5.0 5.0 5.1
    2012 6.0 6.5 6.3 6.0 5.6 5.2 5.0 5.0 5.1
    2013 7.0 6.5 6.0 5.5 5.0 4.8 4.9 5.0
    2014 6.0 5.5 5.0 4.5 4.4 4.5 4.7
    2015 5.0 4.5 4.0 4.0 4.2 4.5
    2016 4.0 3.5 3.7 4.0 4.4
    2017 3.0 3.5 4.0 4.5
    2018 4.0 4.5 5.0
    2019 5.0 5.5
    2020 6.0

    © BrainMass Inc. brainmass.com October 10, 2019, 5:05 am ad1c9bdddf
    https://brainmass.com/economics/bonds/money-banking-492116

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    Solution Summary

    In Table 5.5, show the derivation of each of the following entries:

    a The interest rate of 5.1 percent on a bond sold in 2011 that matures in 7 years.

    b The interest rate of 4.4 percent on a bond sold in 2014 that matures in 5 years.

    c The interest rate of 4.5 percent on a bond sold in 2018 that matures in 2 years.

    $2.19