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(a) I saved $2000 in a one-year-time-deposit a year ago, in which the nominal interest rate was 15%. During this year, the consumer price index increases from 120 to 135. With the above information, calculate the real interest rate, and discuss (with not more than 50 words) whether my purchasing power has been increased, decreased, or remain unchanged. (10 marks) (b) ABC Limited issues a zero-coupon bond which would be matured in 5 years, the face value of each bond is at $10000. If the price of each bond is $8000, calculate the yield to maturity of the bond, and discuss (with not more than 50 words) that whether you would buy it or not if you require 4% (annual) return rate for the bond. (10 marks) (c) Assume you would like to convert 2000 Hong Kong Dollars to Euro on one of the next 6 days, and you expect the foreign exchanges rates between Hong Kong Dollar and Euro in the next 6 trading days are as follows, Date 19 Mar 2021 20 Mar 2021 21 Mar 2021 22 Mar 2021 23 Mar 2021 24 Mar 2021 Hong Kong Dollars per Euro 9.2421 9.2599 9.2758 9.2811 9.2612 9.2325 Which day would you convert the currency (2000 Hong Kong Dollars) in order to get the largest amount of Euro, and how much (Euro) could you get by converting 2000 Hong Kong Dollars? Discuss it with not more than 80 words. (10 marks) (a) I saved $2000 in a one-year-time-deposit a year ago, in which the nominal interest rate was 15%. During this year, the consumer price index increases from 120 to 135. With the above information, calculate the real interest rate, and discuss (with not more than 50 words) whether my purchasing power has been increased, decreased, or remain unchanged. (10 marks) (b) ABC Limited issues a zero-coupon bond which would be matured in 5 years, the face value of each bond is at $10000. If the price of each bond is $8000, calculate the yield to maturity of the bond, and discuss (with not more than 50 words) that whether you would buy it or not if you require 4% (annual) return rate for the bond. (10 marks) (c) Assume you would like to convert 2000 Hong Kong Dollars to Euro on one of the next 6 days, and you expect the foreign exchanges rates between Hong Kong Dollar and Euro in the next 6 trading days are as follows, Date 19 Mar 2021 20 Mar 2021 21 Mar 2021 22 Mar 2021 23 Mar 2021 24 Mar 2021 Hong Kong Dollars per Euro 9.2421 9.2599 9.2758 9.2811 9.2612 9.2325 Which day would you convert the currency (2000 Hong Kong Dollars) in order to get the largest amount of Euro, and how much (Euro) could you get by converting 2000 Hong Kong Dollars? Discuss it with not more than 80 words. (10 marks)

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