Question
Click here to read the eBook: The Determinants of Market Interest Rates Problem 6-13 Default Risk Premium The real risk-free rate, r*, is 2.2%. Inflation
| Click here to read the eBook: The Determinants of Market Interest Rates Problem 6-13 Default Risk Premium The real risk-free rate, r*, is 2.2%. Inflation is expected to average 3.45% a year for the next 4 years, after which time inflation is expected to average 3.5% a year. Assume that there is no maturity risk premium. An 8-year corporate bond has a yield of 9.1%, which includes a liquidity premium of 0.95%. What is its default risk premium? Round your answer to two decimal places. |
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Free Dollar For College For Dummies
Authors: David Rosen, Caryn Mladen
1st Edition
0764554670, 978-0764554674
