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The return on 3 - month Treasury bills is 3 . 5 % . What interest rate would XYZ , Inc. expect to pay on

The return on 3-month Treasury bills is 3.5%. What interest rate would XYZ, Inc. expect to pay on a 10-year bond if it faced a 4% default risk premium and a maturity risk premium of 1.5%?9%
(a) What would you expect the rate on a 10-year Treasury bond would be?5%
(b) If inflation =1.4%, what is the real risk-free rate of return? 2.1%
(c) If inflation =1.4%, what are the real rates of return on the corporate bond and the 10-year Treasury bond? 7.6% and 3.6%

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