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3. You are considering an investment in a one-year government debt security with a yield of 5 percentor a highly liquid corporate debt security with

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3. You are considering an investment in a one-year government debt security with a yield of 5 percentor a highly liquid corporate debt security with a yield of 6.5 percent. The expected inflation rate for the next year is expected to be 1%. Riskles rate of interest is 1%. The questions are: - What would be your real rate earned on either of the two investments? - What would be the default risk premium on the corporate debt security

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