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Suppose the equity market premium is 0 . 0 4 and a security with a beta of + 1 . 2 5 has an equilibrium

Suppose the equity market premium is 0.04 and a security with a beta of +1.25 has an equilibrium expected rate of return of 0.10. If the government wishes to issue risk-free zero-coupon bonds with a term to maturity of one period and a face value per bond of 100,000, how much can the government expect to receive per bond?
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