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An analyst gave us the the The Real Rate of Interest: r* = 1.5% Inflation Premium (IP) is expected to be: Year one 1%,
An analyst gave us the the The Real Rate of Interest: r* = 1.5% Inflation Premium (IP) is expected to be: Year one 1%, Year two = 2%, and Year three = 3% = Maturity Risk Premium (MRP) = 0.1 X (t-1) % Liquidity Premium (LP) for a long term security= 0.25% Default Risk Premium (DRP) for a long term security=2% What is the Yield on a 3-year Corporate Bond? 4.25% 5.95% 6.21% 7.95% 8% None of the answers is correct
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