View Policies Current Attempt in Progress How strong is the correlation between the inflation rate and 30-year U.S. Treasury yields? The following data published by Fuji Securities are given as pairs of inflation rates and Treasury yields for selected years over a 35-year period. Inflation Rate 30-Year Treasure Yield 1.57% 3.05% 2.23 3.93 2.07 4.68 4.53 6.57 7.25 8.27 9.25 12.08 5.12 10.27 4.62 8.45 Compute the Pearson product-moment correlation coefficient to determine the strength of the correlation between these two variables. Comment on the strength and direction of the correlation. (Round the intermediate values to 4 decimal places. Round your answer to 3 decimal places.) r = There is a eTextbook and Media Save for Later between the inflation rate and the thirty-year treasury yield. SUPPORT

Consider the following table for an eight-year period:  Year T-bill return Inflation 1 7.47 % 8.53 % 2 8.94   12.16   3 6.05   6.76   4 5.97   5.04   5 5.63   6.52   6 8.54   8.84   7 10.74   13.11   8 13.00   12.34       Calculate the average return for Treasury bills and the average annual inflation rate (consumer price index) for this period. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)      Average return for Treasury bills  % Average annual inflation rate  %   Calculate the standard deviation of Treasury bill returns and inflation over this time period. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)      Standard deviation of Treasury bills  % Standard deviation of inflation  %    Calculate the real return for each year. (A negative answer should be indicated by a minus sign. Leave no cells…

Consider the following table for an eight-year period: Year T-bill return Inflation 123L 7.41% 8.59% 8.64 12.22 5.99 6.82 4 5.67 4.98 5.57 6.58 6 8.24 8.90 7 8 10.68 12.70 13.17 12.40 a. Calculate the average return for Treasury bills and the average annual inflation rate (consumer price index) for this period. Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. b. Calculate the standard deviation of Treasury bill returns and inflation over this time period. Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. c. Calculate the real return for each year. Note: A negative answer should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. d. What is the average real return for Treasury bills?…

es www Year 1 2 3 4 5 Returns X59200 15 % -22 10 10 Y 22% 30 -27 "* 10 21 Using the returns shown above, calculate the arithmetic average returns, the variances, and the standard deviations for X and Y. (Do not round intermediate calculations. Enter your average return and standard deviation answers as a percent rounded to 2 decimal places, e.g., 32.16. Enter your variance answers rounded to 5 decimal places, e.g., .16161.) Average returns Variances Standard deviations X 15 % % % Y % &

Use the following information about today's U.S. Treasury STRIP yield curve to answer questions 19-21. One year spot rate Two year spot rate Three year spot rate 1.95 % p.a. 2.30% p.a. 2.45% p.a. 19. What is the market consensus expectation of one year spot rates for delivery one year from now? a. 1.95% p.a. b. 2.65% p.a. c. 2.70% p.a. d. 2.30% p.a. e. 2.75% p.a. 20. What is the market consensus expectation of one year spot rates for delivery two years from now? a. 1.95% p.a. b. 2.65% p.a. c. 2.70% p.a. d. 2.30% p.a. e. 2.75% p.a. 21. How is the one year spot rate expected to change over the next year? a. An increase of 8 basis points. b. An increase of 50 basis points. c. A decrease of 5 basis points. d. An increase of 70 basis points. e. An increase of 35 basis points.

Consider the following table for a seven-year period: Year 1 2 34467. 5 U.S. Treasury Bills 4.00% 3.85 4.75 5.17 2.97 1.85 1.58 Returns Average real return. Inflation -1.26% -2.40 -1.30 0.72 -6.54 -9.46 -1.41 What was the average real return for Treasury bills for this time period? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g... 32.16. %

Suppose we have the following Treasury bill returns and inflation rates over an eight- year period: Year Treasury Bills Inflation 9.57% 12345678 7.96% 8.76 6.59 5.74 6.17 8.41 11.38 13.02 13.22 7.71 5.48 7.47 9.84 14.14 13.56 c. What is the average real return for Treasury bills over this period? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Average real return

Suppose we have the following Treasury bill returns and inflation rates over an eight year period:   Year Treasury Bills Inflation 1 10.45%         12.55%         2 11.36            16.00            3 9.06            10.29            4 8.34            7.97            5 8.88            10.29            6 11.23            12.77            7 14.11            16.98            8 15.97            16.90                a. Calculate the average return for Treasury bills and the average annual inflation rate for this period. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)         Treasury bills  %     Inflation  %       b. Calculate the standard deviation of Treasury bill returns and inflation over this period. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)         Treasury bills  %     Inflation  %…

Consider the following US treasury rate table expressed in percentage. Maturity Yield Last Last Yesterday R(0,t) Week Month 6 Month 2.65 2.35 1.85 1.55 1 Year 2.75 2.70 2.20 1.90 2 Year 3.60 2.90 2.40 2.10 3 Year 4.00 4.65 4.15 3.85 5 Year 4.80 4.70 2.20 3.90 10 Year 5.00 4.90 4.40 4.10 30 Year 5.50 5.30 4.80 4.50 The forward rate F(2,1) is the rate that applies to borrowing or lending starting in 2 years from today for an additional year. F(2,1) today is equal to: Answer in percentage with two digits decimal accuracy. Example 10.34

ssume these were the inflation rates and U.S. stock market and Treasury bill returns between 1929 and 1933:   Year Inflation(%) Stock Market Return(%) T-Bill Return(%) 1929 0.5 –13.2 6.1 1930 –5.5 –30.7 2.9 1931 –9.3 –47.6 1.5 1932 –13.2 –8.2 0.8 1933 0.9 64.2 0.6     What was the average risk premium?