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Inflation is expected to be 2% this year and next year, 3% the year after, and 4% the following year. The real risk-free rate is
Inflation is expected to be 2% this year and next year, 3% the year after, and 4% the following year. The real risk-free rate is 1.0%. A bond that matures in 4 years has a liquidity premium is 50bps and its maturity risk premium is 35bps. The bond's default risk premium is 110bps. What is the required rate of interest on this 4 -year corporate bond, which has a rating of A-? 6.95% 5.70% 5.95% 4.95% It cannot be determined from the information given
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