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Excel Online Structured Activity: Interest rate premiums A 5-year Treasury bond has a 4% yield. A 10-year Treasury bond yields 6.45%, and a 10-year corporate

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Excel Online Structured Activity: Interest rate premiums A 5-year Treasury bond has a 4% yield. A 10-year Treasury bond yields 6.45%, and a 10-year corporate bond yields 9.5%. The market expects that Inflation will average 3.75% over the next 10 years (IP20 = 3,75%). Assume that there is no maturity risk premium (MRP.HC) and that the annual real Tisk-free rate, will remain constant over the next 10 years. (Hint: Remember that the default risk premium and the liquidity premium are sero for Transury securities ORP P.) A 5-year corporate bond has the same default risk premium and liquidity premium as the 10-year corporate bond described. The data has been collected in the Microsoft Excel Online fie below. Open the spreadsheet and perform the required analysis to answer the question below Open spreadsheet What is the yield on thit 5-year corporate bond? Round your answer to two decimal places. Check My Work Robot Problem Excel template Search (C File Home Insert Draw Page Layout Formulas Data Review Vid M Arial 10 B Av. . B12 D E F 4.00% 6.45% 9.50% DRP Treasury 3.75% 0.00% 0.00% 0.00% Fornlulas #N/A #N/A A 1 Interest rate premiums 2 35-year Treasury yield (Ts) 4 10-year Treasury yield (To) 5 10-year Corporate yield (Co) 6 Inflation Premium over 10 years (IPo) 7 Maturity Risk Premium (MRP) 8 9 LP Treasury 10 DRPC + LPcs = DRPC + LPC10 11 12 Real risk-free rate, r* 13 14 Inflation premium over 5 years (IP) 15 16 DRP+ LP 17 18 5-year Corporate yield (C) 19 20 21 22 23 24 25 26 27 28 29 30 31 32 Sheet1 + Calculation Mode Automane Won State #N/A #N/A M M

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