Question
The expected inflation rate is 4.0% and the nominal risk-free rate is 5.0%. The default risk premium is 1.85% and the maturity risk premium is
The expected inflation rate is 4.0% and the nominal risk-free rate is 5.0%. The default risk premium is 1.85% and the maturity risk premium is 2.5%. What is the 30-year Treasury bond interest rate?
| 7.50% | ||
| 11.78% | ||
| 9.43% | ||
| 13.63% |
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Financial Economics
Authors: Frank J. Fabozzi, Edwin H. Neave, Guofu Zhou
1st Edition
0470596201, 9780470596203
