Why may investors buy a Treasury bill with a negative real interest rate? O fear...
80.2K
Verified Solution
Link Copied!
Question
Finance
Why may investors buy a Treasury bill with a negative real interest rate? O fear of rising inflation concern about high yields on other bonds concern about the high default risk of alternative investments fear of default by the US government a bond's total rate of return equals its current yield plus the rate of capital gain or loss Osum of the current yield and the expected rate of inflation. Osum of the current yield yield to maturity. if we have an expected inflation of 5% none of the listed answers are correct Nominal interest rates are not affected by expected inflation rates Nominal interest rates should be higher than 5% Nominal interest rates should be less than 5% coupon bonds Opay the principal at maturity plus interest every period till the bond matures O make a single payment of interest and principal. O make multiple payments of principal, but a single payment of interest. make a single payment of principal at the time the bond is issued and multiple payments of interest over the life of the bond. A discount bond can have more than a year of maturity O true O false
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
