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Please help The real risk-free rate, r, is 1.6%. Inflation is expected to average 1.3% a year for the next 4 years, after which time
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The real risk-free rate, r, is 1.6%. Inflation is expected to average 1.3% a year for the next 4 years, after which time infiation is expected to average 4.3% a vear. Assume that there is no maturity risk premium. An B-year corporate bond has a yiefd of 11.8%, which includes a liquidity premium of 0.3%. What is its defoult risk premilim? Do not round intermediate calculations. Roand your answer to two decimal placesi Step by Step Solution
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