The following information was gathered by a security analyst. The real rate of interest is 4% and is expected to remain constant for the next 3 years, Inflation is expected to be 2% . The maturity...


The following information was gathered by a security analyst. The real rate of interest is 4% and is expected to remain constant for the next 3 years, Inflation is expected to be 2% . The maturity risk premium is expected to be 0.3 x (t-1)%, The liquidity premium on relevant 3-year securities is 0.75% and the default risk premium on relevant 3-year securities is 0.6%. What is the yield in percent on a 3-year corporate bond?



Jun 03, 2022
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