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If Bills Corp just received a loan from the local bank with a term of 2 years at a rate of 15.5% rate. The company's
If Bills Corp just received a loan from the local bank with a term of 2 years at a rate of 15.5% rate. The company's liquidity risk is 3%, the maturity risk is expected to be 2% and the default risk is expected to be 2.5%. Inflation is expected to be 5% in year 1 and 4% in year 2. What is the pure rate of interest? Show work.
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