1. A one-year U.S. Treasury security has a market interest rate of 2.25 percent. If the expected real rate of interest is 1.5 percent, what is the expected annual inflation rate?
2. You wish to have $6,000 in 9 years, how much do you need to deposit today into an account paying 5% compounded annually?
3. Assume investors expect a 2.0 percent real rate of return over the next year. If inflation is expected to be 0.5 percent what is the expected market interest rate for a one-year U.S. Treasury security?