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Tools Q Search this course Ch 06-End-of-Chapter Problems Interest Rates-GRADED x Back to Assignment Attempts Average/1 4. Problem 6.13 (Default Risk Premium) ellook The real
Tools Q Search this course Ch 06-End-of-Chapter Problems Interest Rates-GRADED x Back to Assignment Attempts Average/1 4. Problem 6.13 (Default Risk Premium) ellook The real risk-free rate, r, is 1.5%. Inflation is expected to average 1.4% a year for the next 4 years, after which time inflation is expected to average 4.8% a year. Assume that there is no maturity risk premium. An 11-year corporate bond has a yield of 10.2%, which includes a liquidity premium of 0.4%. What is its default risk premium? Do not round intermediate calculations. Round your answer to two decimal places. A-2 Grade it Now Save & Continue Continue without saving O N
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