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Question 1 1 pts If the real (before inflation) rate is 1.56% and expected inflation is 1.0%, what is the expected US government (risk free)

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Question 1 1 pts If the real (before inflation) rate is 1.56% and expected inflation is 1.0%, what is the expected US government (risk free) interest rate for the same period? Express answer as a 4 digit decimal so express 7.45% as .0745). Question 2 1 pts You are estimating the correct rate for a small company's bond with a maturity of 20 years. You estimate the real risk-free rate is 0.2%, the maturity risk premium on a 20 year bond is 0.9%, and the expected average inflation over the 20 years is 1.1%. You estimate the company's default risk premium is 2.6% and due to the expected infrequent trading the liquidity risk premium for the bond is 0.9%. What is the expected rate on the bond? Express in DECIMALS, not %, so 5.22% should be .0522

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