Question
You are given the following information: r* = 1.5% Investors expect inflation to average 3% per year into the foreseeable future The MRP on 200
You are given the following information: r* = 1.5% Investors expect inflation to average 3% per year into the foreseeable future The MRP on 200 year bonds = 2% The LP on U.S. and Yubaba Inc. bonds = 0 The interest rate on a 20 year loan to Yubaba Inc. is 1.25 times the rate on a 20 year loan to the U.S. government
a) What is the interest rate on a 1 year loan to the U.S. government?
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Personal Finance
Authors: Jack Kapoor, Les Dlabay, Robert J Hughes
9th Edition
0073382329, 9780073382326
