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pls double check answer. need answer in less than 1 hour pls. I will give thumbs up.... pls double check numbers on the question and also double check answer thank u
5) real risk-free rate on interest, r* is 3%, and it is expected to remain constant over time. Inflation is expected to be 5% per year for the next 2 years and 3.5% for the next 3 years. The MRP -0.1 x (t-1)%, where t = the bond's maturity. The liquidity premium for a BBB-rated bond is 0.8% If the yield on a 6-year Treasury bond is 7.4%. What does that imply about expected inflation in 6 years using the arithmetic average of the expected inflation? 1.60% 3.50% 2.70% 13.20% 90%Step by Step Solution
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