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The real risk-free rate, r* is 1.75%. Inflation is expected to average 2.9% a year for the next 4-years, after which time inflation is expected
The real risk-free rate, r* is 1.75%. Inflation is expected to average 2.9% a year for the next 4-years, after which time inflation is expected to average 4.6% a year. Assume that there is no maturity risk premium. An 11-year corporate bond has a yield of 10.7%, which includes a liquidity premium of 0.95%. What is its default risk premium?
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Personal Finance For Musicians
Authors: Bobby Borg
1st Edition
1538163306, 978-1538163306
