Question
CAN YOU CANCEL THIS REQUEST OR NOT DO IT. I AM MISSING AN IMPORTANT PART, THANK YOU Q-1 The real risk-free rate of interest, is
CAN YOU CANCEL THIS REQUEST OR NOT DO IT. I AM MISSING AN IMPORTANT PART, THANK YOU
Q-1
The real risk-free rate of interest, is 3%, and it is expected to remain constant over time. Inflation is expected to be 2% per year for the next 3 years and 4% per year for the next 5 years. The maturity risk premium is equal to 0.1 x (t-1) %, where t = the bonds maturity. The default risk premium for a BBB-rated bond is 1.3%.
Then: What is the average expected inflation rate over the next 4 years? ,What is the yield on a 4-year Treasury bond?, What is the yield on a 4-year BBB-rated corporate bond with a liquidity premium of 0.5%?,What is the yield on an 8-year Treasury bond?,What is the yield on an 8-year BBB-rated corporate bond with a liquidity premium of 0.5%?,If the yield on a 9-year Treasury bond is 7.3%, what does that imply about expected inflation in 9 years?
Note: answer is a percentage, enter only the number.
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