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Market interest rate = 7%; real rate = 2%; inflation premium = 4%; and maturity risk and liquidity premiums = 0%. What is the default

  1. Market interest rate = 7%; real rate = 2%; inflation premium = 4%; and maturity risk and liquidity premiums = 0%. What is the default risk premium?

    1. 1%

    2. 2%

    3. 3%

    4. 4%

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