our brother in a bank told you that the real risk-free rate is 4.87%, Inflation...

90.2K

Verified Solution

Question

Finance

our brother in a bank told you that the real risk-free rate is 4.87%, Inflation is expected to be 2.36% this year and 5.18% during the next two years. Assuming that maturity risk premium is 0.3% for all long-term securities. Default risk for corporate bonds is 2.24%, and liquidity risk premium is 0.8%. What is the yield on 2-year corporate bond? (Note, if your answer is 12.34%, just enter your answer as 12.34)

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: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students