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ons Problem 6.13 (Default Risk Premium) Question 4 of 16 Check My Work (1 remaining) eBook The real risk-free rate, r*, is 3.15%. Inflation is

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ons Problem 6.13 (Default Risk Premium) Question 4 of 16 Check My Work (1 remaining) eBook The real risk-free rate, r*, is 3.15%. Inflation is expected to average 1.6% a year for the next 4 years, after which time inflation is expected to average 4.85% a year. Assume that there is no maturity risk premium. An 8-year corporate bond has a yield of 11%, which includes a liquidity premium of 0.85%. What is its default risk premium? Do not round intermediate calculations. Round your answer to two decimal places. % . 1. 2. 13. 14

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