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1.Suppose a security's equilibrium rate of return is 8% and it has no special covenants. For all securities, the inflation risk premium is 1.75% and

1.Suppose a security's equilibrium rate of return is 8% and it has no special covenants. For all securities, the inflation risk premium is 1.75% and the real interest rate is 3.5%. The security has a liquidity risk premium of 0.25%. The maturity risk premium is 0.85%. What is the security's default risk premium?

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