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Assume the following Risk Premiums: r* = ? IP =1.5% LP = .5% MRP = .8% DRP = .66% if the nominal interest rate a

Assume the following Risk Premiums: r* = ? IP =1.5% LP = .5% MRP = .8% DRP = .66% if the nominal interest rate a 180 day Treasury Bill (a short term Government security) is 5%, what is the nominal interest on a 10 year corporate bond. KEEP EVERYTHING IN % FOR THIS PROBLEM

A. 6.96%

B. 7.62%

C. 5.91%

D. 6.45%

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