Question
Kern Corporation's 5-year bonds yield is 6.90%.The real risk-free rate is r* = 2.5%, the default risk premium for Kern's bonds is DRP = 1.90%,
Kern Corporation's 5-year bonds yield is 6.90%.The real risk-free rate is r* = 2.5%, the default risk premium for Kern's bonds is DRP = 1.90%, the liquidity premium on Kern's bonds is LP = 1.3%, and the maturity risk premium is 0.4%. What is the inflation premium (IP)?
Group of answer choices
0.75%
0.80%
0.66%
0.98%
0.76%
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Introductory Econometrics For Finance
Authors: Chris Brooks
2nd Edition
052169468X, 9780521694681
