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Determine the nominal interest rate on Sam's bonds, if the real interest rate is 4%, the inflation risk premium 3% the Treasury rate is 7%,
Determine the nominal interest rate on Sam's bonds, if the real interest rate is 4%, the inflation risk premium 3% the Treasury rate is 7%, the maturity risk of the bonds is 2 %, the risk of default is 3%, and the liquidity risk of the bond is 2%? Find the nominal interest rate? Sorry, I left out the inflation premium risk, it is 3%.
What is the nominal risk? Explain
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