Question
The real risk-free rate is 3%. The market expects that inflation will be 3% for each of the next 5 years, and 5% a year
The real risk-free rate is 3%. The market expects that inflation will be 3% for each of the next 5 years, and 5% a year thereafter. The maturity risk premium is estimated to be MRPt = 0.1%(t - 1). What is the yield on a Treasury bond that matures in 12 years?
- A. 8.10%
- B. 8.68%
- C. 8.45%
- D. 8.27%
- E. 8.53%
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Auditing That Matters Case Studies
Authors: Norman David Marks
1st Edition
B089J17FFW, 979-8650160410
