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Q1: The expected inflation rate is 2.8%.What is the approximate nominal interest rate if the real rate of interest is 1%? Q2: The interest rate

Q1: The expected inflation rate is 2.8%.What is the approximate nominal interest rate if the real rate of interest is 1%?

Q2: The interest rate (yield) on Treasury bonds is 3.4% and the expected inflation rate is 1.2%. What is the exact real rate of interest?

Q3: A corporate bond with 10 years to maturity yields 5.1%, while Treasury notes of the same maturity yield 2.4%. The corporate bond has a liquidity premium of 1.1%. What is the default risk premium on the corporate bond?

Q4: Treasury note with 5 years to maturity yields 2.4%. The average expected inflation rate over the next 5 years is 0.2%, and the real short-term risk-free rate is 1%. What is the maturity risk premium?

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