Answer Happy

AssignmentAttachment_4038F325 - Protected View - Saved to this PC Search razan hawashe esign Layout References Mailings Review View Help Enable Editing the Internet can contain viruses. Unless you need to edit it's safer to stay in Protected View. Max. Marks 15 Martina Navola is a successful TV actress and you are her financial manager. Lately she is intending to invest in some fixed income securities. Her dilemma is about different levels of interest rates as what factors determine those levels? She is asking you to respond to the following details: 1. What are the most essential factors that differentiate the level of interest rates in an economy? 2. How risk-free real return is different than nominal risk free return and how these two rates can be measured? 3. What do the business magazines mean by the following terms: (1) Inflation Premium (2) Default Risk Premium (3) Liquidity Premium (4) Maturity Risk Premium (MRP). 4. Which of the above premiums determine the return on: (1) short-term government bonds (2) long-term government bonds (3) short-term corporate securities (4) long-term corporate securities 5. How the time based term effects interest rates and its yield curve? 6. Assume that market expects the Inflation rate to be 3% next two years, 6% later year and 7% thereafter. The risk free rate is 2% whereas the Focus th 29"C Clear DOLL F3 F5 F6 F7 F8 F9 F10 F11 F12 Prise F4 K $ % & * C # z < CC දී. r 6 7 ។ > 8 g 9 0