1. The real risk-free rate of interest is 4%. Inflation is expected to be 2% this year and 4% during the next 2 years. Assume that the maturity risk premium is zero. What is the yield on 2-year Treasury securities? What is the yield on 3-year Treasury securities?
2. What does waste increase costs? Give three examples.
3. Mutual funds and ETF's are founding investments in portfolios. What are the similarities and differences? What are the advantages and disadvantages? If you were asked to put a portfolio together, would you chose one or the other or both and why?