Joanna Williams Purchased a One-Year Treasury Bill at $100

question 58

Short Answer

Joanna Williams purchased a one-year Treasury bill at $100. This bond does not have any coupon payment, but Joanna will get $105 at maturity. The inflation rate in a year's time is expected to be 1.3%.
A) What is the income yield from this investment?
B) What is the nominal rate of return from this investment?
C) What is the real rate of return from this investment?

• A) What is the income yield from this investment?
• B) What is the nominal rate of return from this investment?
• C) What is the real rate of return from this investment?

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