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A particular security's equilibrium rate of return is 8.25%. For all securities, the inflation is promis 2.35% and the real interest rate is 3.5%. The

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A particular security's equilibrium rate of return is 8.25%. For all securities, the inflation is promis 2.35% and the real interest rate is 3.5%. The security's credit risk premium is 0.8% and maturity premium is 1.15%. The security is backed by high-quality collateral evaluated as 05X Choose the correct statement. Liquidity risk premium-0.95%: the collateral reduces the credit risk of the bond. O Liquidity risk premium-1.15%; the collateral reduces the credit risk of the bond. Liquidity risk premium=0.15%; the collateral increases the liquidity risk of the bond. O Liquidity risk premium-(-0.05%); the collateral reduces the credit risk of the bond

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