Question
A particular security's equilibrium rate of return is 9%. For all securities, the inflation risk premium is 2.75 percent and the real interest rate is
A particular security's equilibrium rate of return is 9%. For all securities, the inflation risk premium is 2.75 percent and the real interest rate is 3 percent. The security's liquidity risk premium is .50 percent and maturity risk premium is .75 percent. The security has no special covenants. What is the security's default risk premium? Hint: i* = IP + RIR + DRP + LRP + SCP + MRP
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Finance For IT Decision Makers
Authors: Michael Blackstaff
3rd Edition
1780171226, 978-1780171227
