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I need help but also someone to explain this to me. I dont understand this question at all ): The real risk-free rate (r.) is

I need help but also someone to explain this to me. I dont understand this question at all ): image text in transcribed
The real risk-free rate (r.) is 2.8% and is expected to remain constant. Inflation is expected to be 5% per year for each of the next two years and 4% thereafter. The maturity risk premium (MRP) is determined from the formula: 0.1(t1)%, where t is the security's maturity. The liquidity premium (LP) on all Nitreca Chemicals Inci's bonds is 0.55%. The following table shows the current relationship between bond ratings and default risk premiums (DRP): Nitreca Chemicals inc, Issues seven-year, AA-rated bonds, What is the yield on one of these bonds? Disregard cross-product terms; that is, if averaging is required, use the arithmetic average. 8.49% 9.04% 8.44\% 4.75% Based on your uncerstanding of the determinants of interest rates, if everything else remains the same, which of the following will be true? The yield on U.5. Treasury securities divays remains static. An AAA-rated bond has less default risk than a BB-rated bond

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