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1. Use the following information to calculate the interest rate on an eightyear bond just issued by Berber In: Inflation: next two years = 2.5%,

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1. Use the following information to calculate the interest rate on an eightyear bond just issued by Berber In: Inflation: next two years = 2.5%, year 3 and beyond = 4.5% Pure Rate = 2.0% Maimity Risk Premium = zero for a 1year maturity, increasing by .1% each year thereafter Default Risk Premium = 1.5% Liquidity Risk Premium = I|II.EI% for treasuries; [1.5% for Corporate bonds a. T.?% b. 8.2% c. E.?% d. 9.2% e 5.4%

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