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The volatility of an asset is 2% per day. What is the standard deviation of the percentage price... Show more Suppose the real risk-free rate is 3.50%, inflation next year is expected to be 1.5%, 2.5% two years from now and 3% thereafter. There is a maturity premium of 0.2% per year to maturity i.e., MRP = 0.20%(t), where t is the years to maturity. Suppose also that a liquidity premium of 0.50% and a default risk premium of 1.35% exist. What is the yield on a 5-year A-rated corporate bond and on a 10-year Treasury bond?

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Financial Management, Finance

Category:- Financial Management
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