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problem: The real risk-free rate is 2.5%. Inflation is expected to average 2.8% a year for the next 4 years, after which time inflation is expected average 3.75% a year. Suppose that there is no maturity risk premium. An eight (8) year corporate bond has a yield of 8.3%, which includes a liquidity premium of 0.75%. find out its default risk premium?

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