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4. You observe the following information Real interest rate: 1.1% Liquidity premium: 0.4% Default premium: 0.6% Maturity risk premium: 0.125%* (T-1): (T = 5 years)

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4. You observe the following information Real interest rate: 1.1% Liquidity premium: 0.4% Default premium: 0.6% Maturity risk premium: 0.125%* (T-1): (T = 5 years) Expected average annual inflation over the next 5 years is 5%. a. Estimate the yield on a 5-year Treasury bond b. Estimate the yield on a 5-year Corporate bond C. Calculate the corporate yield spread

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