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6 decimals with instruction, please Determinants of Interest Rates Using the following DATA: R*= 2.95% I 1 = 5% I 2 = 4% I 3

6 decimals with instruction, please

Determinants of Interest Rates

Using the following DATA:

R*= 2.95%

I1 = 5%

I2 = 4%

I3 = 3%

I4 =2%

MRP = .60% ( t - 1) (NOTE: This is a PERCENTAGE, not a DECIMAL MRP!) t = number of years to maturity

DRP = 8.4%

LP = 3.25%

CALCULATE:

5 year TREASURY BOND RATE ??

8 year CORPORATE BOND RATE ??

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