1. The real risk-free rate is 4%, and the annual inflation rate is expected to be 2% next year, 3% in year two, and 5% in year three. Three-year Treasury securities yield 10%. What is the maturity risk premium for the 3-year treasury?
2. What is the future value of $50 with an interest rate of 12% compounded continuously for 5 years?
3. A lender wished to earn an annual simple interest rate of 6%. What annual simple discount rate should be charged on loan for 3 months?