Question
Suppose the real rate of interest is 1%, expected inflation is 2%, the default risk on a given bond is 3%, the liquidity premium is
Suppose the real rate of interest is 1%, expected inflation is 2%, the default risk on a given bond is 3%, the liquidity premium is 2%, and the maturity premium is 1%. What is the risk free rate of return? What is the interest rate for this bond?
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Return Distributions In Finance
Authors: Stephen Satchell, John Knight
1st Edition
0750647515, 978-0750647519
