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A 2 - year Treasury bond has a 4 . 0 0 % yield. A 5 - year Treasury bond yields 6 . 0 0
A year Treasury bond has a yield. A year Treasury bond yields and a year corporate bond yields The market expects that inflation will average over the next years. Assume that MRP x t where t is the number of years to maturity. Also assume that the annual real riskfree rate will remain constant over the next years.
A year corporate bond has the same default risk premium and liquidity premium as the year corporate bond described. What is the yield on this year corporate bond?
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