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The pure rate of interest is 2.5 percent and the inflation premium is 5 percent. If you require a risk premium of 3.5 percent, what

The pure rate of interest is 2.5 percent and the inflation premium is 5 percent. If you require a risk premium of 3.5 percent, what is the risk-free rate? Use exact formulation. (Hint: Set risk premium equal to zero!) 7.50% 6.00% 6.09% 7.62% 8.75%

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