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4. The real risk-free rate, r, is 1.25%, and it is expected to remain constant over time. Inflation is expected to be 2.05% per year

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4. The real risk-free rate, r, is 1.25%, and it is expected to remain constant over time. Inflation is expected to be 2.05% per year for the next three years, after which time inflation is expected to remain at a constant rate of 3.25% per year. The maturity risk premium is equal to 0.1(t = 1)%, where t = the bond's maturity. What is the yield on a 10-year Treasury hond? 5. You are about to purchase your first house for $195,000. You have 15% of the purchase price for a down payment and you will finance the remaining amount with a 30-year fixed mortgage with a rate of 3.95%. (7 points) a. What is the amount you are obtaining your mortgage for? b. What is the amount of your monthly payment? c. What percentage of your payments made in the first 3 years will be applied to interest? d. What is the total dollar amount applied to principal after you have made your regular payments on this mortgage for 5 years? e At the end of 7 years you have a job opportunity in another state and need to sell your house. What is the balance due on your mortgage at that time

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