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The risk free rate of interest is 2.5%, Inflation is expected to be 1.6% this year , 2% next year and 3% the following years.

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The risk free rate of interest is 2.5%, Inflation is expected to be 1.6% this year , 2% next year and 3% the following years. Assume the maturity risk premium is calculated to be .15 x(t-1)% default risk premium is fixed at 1% and liquidity premium is fixed at 1%

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