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A 5 -year Treasury bond has a 4.55% yield. A 10 -year Treasury bond yields 6.95%, and a 10 -year corporate bond yields 8.45%. The

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image text in transcribed A 5 -year Treasury bond has a 4.55% yield. A 10 -year Treasury bond yields 6.95%, and a 10 -year corporate bond yields 8.45%. The market expects that inflation will average 3.75% over the next 10 years (IP10=3.75%). Assume that there is no maturity risk premium (MRP=0) and that the annual real risk-free rate, r, will remain constant over the next 10 years. (Hint: Remember that the default risk premium and the liquidity premium are zero for Treasury securities: DRP=LP=0.) A 5-year corporate bond has the same default risk premium and liquidity premium as the 10-year corporate bond described. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the question below

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