QUESTION 6 Cortland Bank awarded a loan to SunEdison at 12% for 3 years. The pure rate of interest is 2%. The company's default risk premium is 3%, its maturity risk premium is 1% and its liquidity risk premium is 2%. Inflation is expected to be 3% in the first year of the loan and 4% in the second year. What is the inflation rate expected to be in the loan's third year? For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). TTT Arial 3 (12pt) T - - E- Oi's Path:p Words:0 QUESTION 7 Terry has a keen interest in a local company, McKenzie Inc. It is in the molded plastic industry and has been expanding rapidly over the past 5 years to meet the demand for its products. He wants to buy stock in the company and looks it up online. He sees that the prospectus has been approved by the SEC and he believes that means the company is a safe investment. Do you agree or not? EXPLAIN your