5-year T-bonds yield 5.15%. The inflation premium for 5-year bonds is IP = 1.75%, the...
60.1K
Verified Solution
Link Copied!
Question
Finance
5-year T-bonds yield 5.15%. The inflation premium for 5-year bonds is IP = 1.75%, the liquidity premium for BBB rated bonds is LP = 0.75% versus zero for T- bonds, and the maturity risk premium for all bonds is found with the formula MRP = (t - 1)x0.1%, where t = number of years to maturity. What is the real risk-free rate? Select one: a. 1.00% O b. 1.97% O c. 3.00% O d. 1.04% e.-1.15%
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
