You are considering an investment in 30-year bonds issued by Moore Corporation. The bonds have no special covenants.The Wall Street Journalreports that 1-year T-bills are currently earning 2.05 percent. Your broker has determined the following information about economic activity and Moore Corporation bonds:

Real risk-free rate = 0.65%

Default risk premium = 1.95%

Liquidity risk premium = 1.40%

Maturity risk premium = 2.55%

a.	What is the inflation premium?(Round your answer to 2 decimal places.)

ExpectedIP

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b.	What is the fair interest rate on Moore Corporation 30-year bonds?(Round your answer to 2 decimal places.)

Fair interest rate What is the future value of a $970 annuity payment over four years if interest rates are 8 percent?(Do not round intermediate calculations and round your final answer to 2 decimal places.)

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