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Now its time for you to practice what youve learned. Suppose the real risk-free rate of interest is r*=5% and it is expected to remain

Now its time for you to practice what youve learned. Suppose the real risk-free rate of interest is r*=5% and it is expected to remain constant over time. Inflation is expected to be 1.80% per year for the next 2 years and 4.00% per year for the next 4 years. The maturity risk premium is 0.1(t1)% , where t is number of years to maturity, a liquidity premium is 0.35%, and the default risk premium for a corporate bond is 1.10%. Complete the following table by calculating yields on Treasury and corporate bonds of various maturity. Value The yield on a 3-year Treasury bond The yield on a 3-year corporate bond

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