Question
Problem 6-14 Determinants of Interest Rates for Individual Securities (LG6-4) NikkiGs Corporations 10-year bonds are currently yielding a return of 6.95 percent. The expected inflation
Problem 6-14 Determinants of Interest Rates for Individual Securities (LG6-4)
| NikkiGs Corporations 10-year bonds are currently yielding a return of 6.95 percent. The expected inflation premium is 1.35 percent annually and the real risk-free rate is expected to be 2.30 percent annually over the next ten years. The liquidity risk premium on NikkiGs bonds is 0.15 percent. The maturity risk premium is 0.30 percent on 3-year securities and increases by 0.05 percent for each additional year to maturity. Calculate the default risk premium on NikkiGs 10-year bonds. (Round your answer to 2 decimal places.) |
| Default risk premium | % |
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Passive Income Stacking Handbook How To Reach Financial Freedom Faster Regardless Of Your Age Or Situation
Authors: Mark Walters
1st Edition
0578530171, 978-0578530178
