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Crockett Corporation's 5 - year bonds yield 6 . 3 5 % . The real risk - free rate is r * = 3 .

Crockett Corporation's 5-year bonds yield 6.35%. The real risk-free rate is r*=3.60%, the default risk premium for Crockett's bonds is DRP =1.00%, the liquidity premium on Crockett's bonds is LP =0.60% and the maturity risk premium is assumed to be zero. What inflation premium (IP) is built into 5-year bond yields?

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