FIN 424 SEU Relationship Between Inflation and Business Cycle Discussion Questions
Description
Q.1 (a).What is the relationship between Yield Curve and Fiscal and Monetary Policies? (1.5 Marks)
Q.1 (b). Describe the relationship between Inflation and Business Cycle. (1.5 Marks)
Q.2.Explain about the different sources of excess return in international bond portfolios (3 Marks)
Q.3.Given the following information, calculate the short-term interest rate target. (2Marks)
Neutral rate4%
Inflation target3%
Expected inflation7%
GDP long-term trend2%
Expected GDP growth0%
Q.4.Given the following information, calculate the Sharpe Ratio. (2 Marks)
Return of Portfolio30
Risk-free Return10
Standard –deviation of portfolio’s excess return15
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