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Question 12 (1 point) The real risk-free rate is 0.25%. Inflation is expected to average 1.0% a year for the next 2 years, after which
Question 12 (1 point) The real risk-free rate is 0.25%. Inflation is expected to average 1.0% a year for the next 2 years, after which time inflation is expected to average 2.00% a year. Assume that there is no maturity risk premium. A 30-year corporate bond has a yield of 30.0%, which includes a liquidity premium of 0.50%. What is its default risk premium? 27.250% 27.817% 27.317% 28.250%
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