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A 5-year Treasury bond has a 4.9% yield. A 10-year Treasury bond yields 6.45%, and a 10-year corporate bond yields E inflation will average
A 5-year Treasury bond has a 4.9% yield. A 10-year Treasury bond yields 6.45%, and a 10-year corporate bond yields E inflation will average 3% over the next 10 years (IP103%). Assume that there is no maturity risk premium (MRP = 0 rate, r*, will remain constant over the next 10 years. (Hint: Remember that the default risk premium and the liquidity p securities: DRP = LP = 0.) A 5-year corporate bond has the same default risk premium and liquidity premium as the 10 data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysi X Open spreadsheet What is the yield on this 5-year corporate bond? Round your answer to two decimal places.
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