Problem 5 Problem 6: K 3.5% Inflation 4.5% 4.0% 2 3.0% 0.5% K 3.5% 0.5% 4.5% 4.0% 0.8% 0.8% 4 + 5

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PROBLEM 5 PROBLEM 6

k= 3.5% Inflation = 4 + 5 = 4.5%


4.0% 2
3.0%
0.5% k= 3.5%
0.5% 4.5%
11.5% 4.0%
0.8%
0.8%
13.5%
PROBLEM 7

TWO YEAR NOTE THREE YEAR NOTE


Inflation = 4 + 5 = 4.5% Inflation = 4 + 5 + 6 = 5.0%
2 3

k= 1.5% k= 1.5%
4.5% 5.0%
0.2% 0.3%
6.2% 6.8%

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