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Question5 1 pts suppose that the real risk-free rate of interest is 2%. Inflation is expected to be 5% this year and 3% thereafter. The
Question5 1 pts suppose that the real risk-free rate of interest is 2%. Inflation is expected to be 5% this year and 3% thereafter. The maturity risk premium is 0.2%(t-1), where t is the number of years until maturity. The default risk premium is 2.5%. The liquidity premium is 0%. What is the nominal interest rate on a 4-year bond? O 8.1% O 19.1% O 85% O 5.8%
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