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You are considering an investment in 30-year bonds issued by Moore Corporation. The bonds have no special covenants. The Wall Street Journal reports that 1-year

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You are considering an investment in 30-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 0.40 percent. Your broker has determined the following information about economic activity and Moore Corporation bonds: Real risk-free rate Default risk premium Liquidity risk premium Maturity risk premium = 0.35% = 1.15% = 0.70% = 0.95% a. What is the inflation premium? b. What is the fair interest rate on Moore Corporation 30-year bonds? For all requirements, round your percentage answers to 2 decimal places. a. Inflation premium % b. Fair interest rate %

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