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Two different companies of approximately similar financial strength and with similar management teams both have 30-year bonds that trade in active secondary markets. Nile Company

Two different companies of approximately similar financial strength and with similar management teams both have 30-year bonds that trade in active secondary markets. Nile Company is located in a country with relatively small increases in overall price levels; its bonds have a 4% return. Amazon Company is located in a country with relatively large increases in overall price levels each year; its bonds have a 14% return. What is the difference in the interest rate between Nile Companys bonds and Amazon Companys bonds called?

A) Default risk premium

B) Inflation premium

C) Liquidity premium

D) Maturity risk premium

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