A) Sqeekers Co. issued 12-year bonds a year ago at a coupon rate of 7.2 percent. The bonds make semiannual payments and have a par value of $1,000. If the YTM on these bonds is 5.5 percent, what is the current bond price?
Current Bond Price?
B) Treasury bills are currently paying 5 percent and the inflation rate is 3.2 percent.
What is the approximate real rate of interest?
Approximate real rate?
What is the exact real rate?