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Calculate a table of interest rates based on the following information: The pure interest rate is 2.5% Inflation expectations for year 1 =
Calculate a table of interest rates based on the following information:
• The pure interest rate is 2.5%
• Inflation expectations for year 1 = 2%, year 2 =4%, years 3-5 =5%
• The default risk is .1% for year one and increases by .1% over each year
• Liquidity premium is 0 for year 1 and increases by .15% each year
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