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A 5-year Treasury bond has a 4.9% yield. A 10 -year Treasury bond yields 6.3%, and a 10 -year corporate bond yields 9.3%. The market

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A 5-year Treasury bond has a 4.9% yield. A 10 -year Treasury bond yields 6.3%, and a 10 -year corporate bond yields 9.3%. The market expects that inflation will average 2.8% over the next 10 years (I10=2.8%). 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 5year corporate bond has the same default risk premium and liquidity premium as the 10 -year corporate bond described. What is the yield on this 5 -year corporate bond? Round your answer to one decimal place

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