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I am not sure if the answers I have chosen are correct Suppose the real risk-free rate of interest is r=4% and it is expected
I am not sure if the answers I have chosen are correct
Suppose the real risk-free rate of interest is r=4% and it is expected to remain constant over time. Inflation is expected to be 1.60% per year for the next two years and 3.90% per year for the next three years. The maturity risk premium is 0.1(t1)%, where t is number of years to maturity, a liquidity premium is 0.35%, and the default risk premium for a corporate bond is 1.50%. The average inflation during the first 4 years is What is the yield on a 4 -year Treasury bond? 6.75% 4.30%8.90%7.05% What is the yield on a 4-year BBB-rated bond? 7.05%8.90%8.55%7.40% If the yield on a 5-year Treasury bond is 7.38% and the yield on a 6-year Treasury bond is 7.88%, the expected inflation in 6 years is (Hint: Do not round intermediate calculations.)Step by Step Solution
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