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The real risk-free rate of interest is expected to remain constant at 3%. Inflation rate is expected to be 2.5% this year, 2.2% next year

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The real risk-free rate of interest is expected to remain constant at 3%. Inflation rate is expected to be 2.5% this year, 2.2% next year and 2.3% per year thereafter. The maturity risk premium (MRP) is equal to 0.12(t1)%, where t= the bond's maturity. A 6 -year corporate bond yields 8%. What is the yield on an 8 -year corporate bond that has the same default risk and liquidity premiums as the 6 -year corporate bond? A) 8.44% B) 8.88% C) 8.24% D) 8.31% E) 8.63%

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