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Interest Rate Determination and Yield Curves b. Finding the yleld for each of the two investments begin{tabular}{|l|r|} hline Rating & multicolumn{1}{|c|}{ DRP + LP }

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Interest Rate Determination and Yield Curves b. Finding the yleld for each of the two investments \begin{tabular}{|l|r|} \hline Rating & \multicolumn{1}{|c|}{ DRP + LP } \\ \hline AAA & 0.10% \\ \hline AA & 0.46% \\ \hline A & 0.80% \\ \hline \end{tabular} 25 7-year Corporate Bond 26 Real risk-free rate 27 Inflation premium 28 Maturity risk premium 29 Liquidity premium 30 Default risk premium 7 -year corporate yield \#N/A \#N/A \#N/A \#N/A \#N/A \#N/A c. Constructing a graph of the yield curve \begin{tabular}{|c|r|} \hline Years to Maturity & \multicolumn{1}{|c|}{ Yield } \\ \hline 1 & 5.27% \\ \hline 2 & 5.37% \\ \hline 3 & 5.55% \\ \hline 4 & 5.59% \\ \hline 5 & 5.53% \\ \hline 10 & 5.61% \\ \hline 20 & 6.05% \\ \hline 30 & 5.76% \\ \hline \end{tabular}

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