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De to study for Quiz over Chapter 6) 4) Kelly Ine's 5-year bonds yield 8.50% and 5-year T-bonds yield 4.90%. The real risk-free rate is
De to study for Quiz over Chapter 6) 4) Kelly Ine's 5-year bonds yield 8.50% and 5-year T-bonds yield 4.90%. The real risk-free rate is = 2.7%, the default risk premium for Kelly's bonds is DRP=0.40%, the liquidity premium on Kellys bonds 2.24 versus zero on T-bonds, and the inflation premium (LP) is 1.5%. What is the maturity risk premium (MAP) on the 5-year bonds
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