Question
ACME industries 10 year corporate bonds are currently yielding 9.00%, and you have found the following interest rate premiums that relate to this investment. -inflation
ACME industries 10 year corporate bonds are currently yielding 9.00%, and you have found the following interest rate premiums that relate to this investment. -inflation rate-2.75%, liquidity premium-0.25%, default risk premium-1.5%, and maturity risk premium-1.25%. Given this information, what is the real risk free rate of return?
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International Finance Theory And Policy
Authors: Paul Krugman, Maurice Obstfeld, Marc Melitz
12th Global Edition
1292417005, 978-1292417004
