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FINA3015- 28 ABC Ines Searbonds yield 7.0% and S-year T-bonde yield 4.70%. The real risk-free rate is r* - 2.5%, the default risk premium for
FINA3015- 28 ABC Ines Searbonds yield 7.0% and S-year T-bonde yield 4.70%. The real risk-free rate is r* - 2.5%, the default risk premium for ABC's bonds is DRP -0.01, the liquidity premium on ABC's bonds is LP-2.4% versus zero on T-bonds, and the inflation premium (IP) is 1.5%. What is the maturity risk premium (MRP) on all 5-year bonds? Select one b. 0.57% 0.74 d 0.70
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