6-1) You read in the newspaper that inflation is expected to be 4 percent next year, 6 percent the following year, and 8 percent thereafter. The Maturity Risk premium is defined as [t-1]*.2\%. Redmond Corp's Bonds have Default Risk Premium of 2% and a Liquidity Premium of 1%. Fundira Corp's Bonds have a Default Risk Premium of 4% and a Liquidity Premium of 3%. Also, the risk free investments currently earn 1.5% return. - What is the Required Rate of Return on the following Bonds? 1 Year Government [T] Bond 3 Year Government [T] Bond 9 Year Government [T] Bond 9 Year Redmond Corp Bond 9 Year Fundira Corp Bond Which company has the safer investment, Redmond or Fundira? Do these conditions indicate a Normal or an Abnormal Curve? Are these conditions consistent with the Pure Expectations Theory (Hypothesis)