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A company's 5-year bonds are yielding 7% per year. Treasurybonds with the same maturity are yielding 5.5% per year, and thereal risk-free rate (r*) is

A company's 5-year bonds are yielding 7% per year. Treasurybonds with the same maturity are yielding 5.5% per year, and thereal risk-free rate (r*) is 2.75%. The average inflation premium is2.35%, 2 answers

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