1 the real risk-free rate is 4 percent and inflation is, Ask an Expert

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1. The real risk-free rate is 4 percent, and inflation is expected to be 4 percent next year and 3 percent for the following 4 years. Assume that the maturity risk premium is zero. What is the yield on 3-year Treasury securities?

2. Jacob Enterprises’ bonds currently sell for $850. They have a 10-year maturity, an annual coupon of $50. What is their current yield? (5.88%) What is the capital gains yield?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92696169

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