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You are given the following information: Real risk-free rate, r* = 1.0% Maturity risk premium, MRP = 0.2% (t - 1) where t = years

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You are given the following information: Real risk-free rate, r* = 1.0% Maturity risk premium, MRP = 0.2% (t - 1) where t = years to maturity Default risk premium, DRP = 0.07%(t = 1) for AT&T bonds but zero for Treasury bonds Liquidity premium is 0.4% for AT&T bonds but zero for Treasury bonds Inflation is expected to be 7 percent, 6 percent, and 5 percent consecutively for the next three years and then 4 percent thereafter. What is the difference in interest rates between ten-year AT&T bonds and ten-year bonds? 0.53% 0.24% 1.13% 0.99% 1.03%

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