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You observe a real interest rate of -2.3%, and measure the liquidity premium at 0.75% and the default premium at 0.45%. You also estimate the

You observe a real interest rate of -2.3%, and measure the liquidity premium at 0.75% and the default premium at 0.45%. You also estimate the maturity risk premium to be equal to 0.165*(t 1)%. Finally, you estimate future inflation rates to be 7%, 5%, 3%, for Years 1 through 3, respectively, and then remain steady at 2% long-term.

Estimate the yield on a 10-year Treasury bond.

Estimate the yield on a 10-year Corporate bond.

Estimate the yield on a 3-year Treasury bond.

(include 3 decimal places)

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