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hi - I am trying to calculate the spot rate on a treasury bill, can you help me understand the formula I should use?
hi - I am trying to calculate the spot rate on a treasury bill, can you help me understand the formula I should use?
You read in the Wall Street Journal (WSJ) that the spot rate on long-term Treasury bonds is 5 percent. Your broker has given you the following estimates of current interest rate premiums:
Inflation premium 2 percent
Maturity risk premium 3 percent
Default risk premium 4 percent
Based on these data, what is the spot rate on Treasury bills?
