You have determined the following data for a given bond: Real risk-free rate (r*) = 3%; inflation premium = 8%; default risk premium = 2%; liquidity premium = 2%; and maturity risk premium = 1%.

What is the interest rate on short-term Treasury securities, or T-bills, of the relevant maturity?

What is the interest rate on long-term corporate bonds, of the relevant maturity?

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jeff jeffy answered 2 years ago

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