The real risk-free rate is 180 inflation is expected to be, Ask an Expert

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The real risk-free rate is 1.80%. Inflation is expected to be 2.60% this year and 3.30% during the next 2 years. Assume that the MRPt = 0.1(t-1)%. The default risk premium on corporate bonds is 1.25% and the liquidity premium on corporate bonds is 0.75%

1) What is the yield on 2-year Treasury securities?

2) What is the yield on 2-year corporate securities?

3) What is the difference between the yield on 3-year corporate and 3-year treasury securities?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92776454

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