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A companys 5-year bonds are yielding 19.3% per year. The real risk-free rate (r*) is 2.3%. The inflation premium is 2.4%, the liquidity premium is
A companys 5-year bonds are yielding 19.3% per year. The real risk-free rate (r*) is 2.3%. The inflation premium is 2.4%, the liquidity premium is 1.3%, and the default risk premium is 0.9%. What is the maturity risk premium on the corporate bonds? *
a) 0.5%
b) 1.4%
c) 2.7%
d) 3.3%
e) None of the above
I need it in 10 mins please
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