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please show all work 1. Suppose the real risk-free rate is 5.50%, the average future inflation rate is 2.25%, and a maturity premium of 0.10%
please show all work 1. Suppose the real risk-free rate is 5.50%, the average future inflation rate is 2.25%, and a maturity premium of 0.10% per year to maturity applies, i.e., MRP = 0.10%(t), where t is the years to maturity. What rate of return would you expect on a 5-year Treasury security 2. if 10-year T-bonds have a yield of 5.2%, 10-year corporate bonds yield 8.5%, the maturity risk premium on all 10-year bonds is 1.1%, and corporate bonds have a 0.2% liquidity premium versus a zero liquidity premium for T-bonds, what is the default risk premium on the corporate bond?
please show all work
2. if 10-year T-bonds have a yield of 5.2%, 10-year corporate bonds yield 8.5%, the maturity risk premium on all 10-year bonds is 1.1%, and corporate bonds have a 0.2% liquidity premium versus a zero liquidity premium for T-bonds, what is the default risk premium on the corporate bond?
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