ACCOUNTING AND FINANCIAL ENGINEERING - EXAMPLE 34.20 : Assume an engineer buys a

ACCOUNTING AND FINANCIAL ENGINEERING - EXAMPLE 34.20 : Assume an engineer buys a $1 bond in period T while the nominal interest rate is R. The inflation rate at T + 1 is anticipated to be I. (a) If the bond is redeemed in period T + 1, how much money will the buyer engineer receive, in term of R, which is not affected by inflation? (b) Find the present value, PV of the proceeds from the bond, in term of R and I. (c) If the bond is redeemed in period T + 1, calculate the real growth or real value of the money that the buyer engineer will receive, in term of r = real interest rate, which is affected by inflation. (d) From the answers in (b) and (c), find the values of x, y and z in the following Fisher equation : (1 + x) = (1 + y) / (1 + z), in term of r, R and I.

Question Posted / kangchuentat

1 Answers
1837 Views
I also Faced
E-Mail Answers

ACCOUNTING AND FINANCIAL ENGINEERING - EXAMPLE 34.20 : Assume an engineer buys a $1 bond in period T..

Answer / kangchuentat

ACCOUNTING AND FINANCIAL ENGINEERING - ANSWER 34.20 : (a) Money received without inflation = $(1 + R). (b) PV = $ [ (1 + R) / (1 + I) ]. (c) Money received with inflation = $(1 + r). (d) Answer in (b) = (c) = $ [ (1 + R) / (1 + I) ] = $(1 + r); then x = r, y = R, z = I. The answer is given by Kang Chuen Tat; PO Box 6263, Dandenong, Victoria VIC 3175, Australia; SMS +61405421706; chuentat@hotmail.com; http://kangchuentat.wordpress.com.

Is This Answer Correct ?

0 Yes

0 No

Post New Answer

More Chemical Engineering Interview Questions

which accomplishments in your present position are you proud of and why?

0 Answers

What is the Chemical Formula of Mineral Oil used in Transformer. It is Challenged for all Chemical Engineers.

6 Answers Ambuja, Oil and Gas Jobs,

What are the three classes of organic solvents?

0 Answers

Calculate the line size for a cooling water line with a volumetric flowrate of 1200m3/h of water. Density of water = 1000kg/m3

1 Answers

pleas tell me about chemical engineering apptitude test..

0 Answers IOCL,

design calculations for reactor

0 Answers

Jspl question paper for freshers requirements chemical engineering diploma

0 Answers

how FOULING effectd the heat transfer rate

12 Answers IOCL,

If I do M tech in chemical engineering from iit kgp,iit delhi or iit kanpur...what are the job opportunities,and what salary they offered.plz tell me...i had 156 all india rank..i did not take admission ..but this year i m thinking to take admission...

2 Answers

send previousyear question paper for ongc gt 2011 chemical engineering written exam

0 Answers ONGC,

What is a good way to get started in doing a plant-wide steam consumption analysis?

0 Answers

Plz if anybody has placement paper of HAL mail me i m Chemical engg my id er.kotnala@gmail.com

0 Answers HAL, IOCL,

For more Chemical Engineering Interview Questions Click Here