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Suppose the real risk-free rate of interest is 3%. Inflation is expected to be 2% for 2 years and then 3% thereafter. The maturity risk

Suppose the real risk-free rate of interest is 3%. Inflation is expected to be 2% for 2 years and then 3% thereafter. The maturity risk premium is 0.1%(t), where t is the number of years until maturity. The default risk premium is 2%. The liquidity premium is 1%. What is the nominal interest rate on a 5 year bond?

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