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Question
The following premiums apply to a 8-month bond: interest rate risk premium = 0.32 percent; liquidity premium = 0.44 percent; default premium = 1.23 percent; inflation premium = 3.12 percent; real rate = 3.20 percent. What is the expected nominal interest rate on a 8-month risky security given these values?A. 5.85 percent
B. 6.45 percent
C. 7.55 percent
D. 8.31 percent
E. 9.30 percent
Answer
This answer is hidden. It contains 62 characters.
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