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You are considering an investment in 20 year bonds issued by Moore Corporation. The bonds have no special covenants. The Wall Street Journal reports that

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You are considering an investment in 20 year bonds issued by Moore Corporation. The bonds have no special covenants. The Wall Street Journal reports that 1-year T-bills are currently earning 6 30 percent Your broker has determined the following information about economic activity and Moore Corporation bonds Real risk-free rate = 0.21% Default risk premium 1.15% Liquidity risk premium = 0.80% Maturity risk premium -0.75% 2. What is the inflation premium? b. What is the fair interest rate on Moore Corporaton 20-year bonds? (For all requirements, round your percentage answers to 2 decimal places. (0.9., 32.16)) a. Inflation premium b. Fair interest rate %

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