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Question 8 1 pts Keys Corporation's 5-year bonds yield 6%, and 5-year T-bonds yield 4%. The real risk-free rate is r = 2.2%, the inflation
Question 8 1 pts Keys Corporation's 5-year bonds yield 6%, and 5-year T-bonds yield 4%. The real risk-free rate is r = 2.2%, the inflation premium for 5 years bonds is IP = 1.4%, the default risk premium for Keys' bonds is DRP 0.44% versus zero for T-bonds, and the maturity risk premium for all bonds is found with the formula MRP = (t - 1)*0.1%, where t = number of years to maturity. What is the liquidity premium (LP) on Keys bonds? 1.56% 1.71% 1.66% O 1.61% 1.51%
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