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Consider the following spot interest rates for maturities of one, two, three, and four yea

Consider the following spot interest rates for maturities of one, two, three, and four yea

Consider the following spot interest rates for maturities of one, two, three, and four years.
 

           r1 = 5.2%    r2 = 5.6%     r3 = 6.3%     r4 = 7.1%

 

Assuming a constant real interest rate of 2 percent, what are the approximate expected inflation rates for the next four years? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)

I1 %

  I2 %

  I3 %

   I4 %
hint Use the Fisher hypothesis and the unbiased expectations theory.

Abhinav 03-Dec-2019

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