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You are considering an investment in an AAA-rated U.S. corporate bond but you are not sure what rate of interest it should payAssume that the real-risk free rate of interest is 1.0%; inflation is expected to be 1.5%; the maturity risk premuim is 2.5%; and, the default risk premuim for AAA rated corporate bond is 3.5%. What rate of interest should the U.S. corporate bond pay? show all work.

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Category:- Basic Finance
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