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5. Suppose the rate of return on a 10-year T-bond is 5.35%, the expected average rate of inflation over the next 10 years is 2.0%,

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5. Suppose the rate of return on a 10-year T-bond is 5.35%, the expected average rate of inflation over the next 10 years is 2.0%, the MRP on a 10-year T-bond is 0.9%, no MRP is required on a TIPS, and no liquidity premium is required on any Treasury security. Given this information, what should the yield be on a 10-year TIPS? Disregard cross-product terms, i.e., if averaging is required, use the arithmetic average. 6. Suppose 10-year T-bonds have a yield of 5.55% and 10 -year corporate bonds yield 9.15%. Also, corporate bonds have a 0.45% liquidity premium versus a zero liquidity premium for T-bonds, and the maturity risk premium on both Treasury and corporate 10 -year bonds is 1.25%. What is the default risk premium on corporate bonds

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