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please write clear and correct and I will upvote thank you. 6-1) You read in the newspaper that inflation is expected to be 4 percent
please write clear and correct and I will upvote thank you.
6-1) You read in the newspaper that inflation is expected to be 4 percent next year, 6 percent the following year, and 8 percent thereafter. The Maturity Risk premium is defined as [t-1]*.2%. Redmond Corp's Bonds have Default Risk Premium of 2% and a Liquidity Premium of 1%. Fundira Corp's Bonds have a Default Risk Premium of 4% and a Liquidity Premium of 3%. Also, the risk free investments currently earn 1.5% return. . O O O What is the Required Rate of Return on the following Bonds? 1 Year Government [T] Bond 3 Year Government [T] Bond 9 Year Government [T] Bond 9 Year Redmond Corp Bond 9 Year Fundira Corp Bond Which company has the safer investment, Redmond or Fundira? Do these conditions indicate a Normal or an Abnormal Curve? O O Are these conditions consistent with the Pure Expectations Theory (Hypothesis)
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