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6. Use the following data to answer questions 6.; r* = 8% IP (1 year bonds) = 3.45% IP (3 year bonds) = 4.20% IP

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6. Use the following data to answer questions 6.; r* = 8% IP (1 year bonds) = 3.45% IP (3 year bonds) = 4.20% IP (5 year bonds) = 4.65% DRP (AAA corporate bonds) = 0.63% DRP (AA+ corporate bonds) = 0.66% LP (AAA corporate bonds) = 0.20% LP (AA+ corporate bonds) = 0.21% MRP = 0.1% x (t-1) where t is the number of years to maturity Calculate the interest rate for a 5 year AAA corporate bond

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