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It is generally assumed and supported by research that r* varies in the range of 1% to 4%. Currently, 5-year TIPS yield negative 0.49% (that means that if inflation is less than 0.49%, a buyer today of such a bond is paying the government to hold their money) and 10-year TIPS yield 0.67%. Regular 5-year Treasuries yield 1.52% and 10 year bonds yield 2.93%. Assume you are considering investing in AAA corporate bonds. How does this information affect your analysis of that decision? Why?

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