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The real rate of interest has been estimated to be 4 percent,and the expected long-term annual inflation rate is 5 percent.Round your answers to the nearest whole number. Show work on excelpleaseWhat is the current risk-free rate of return on 1-year Treasurybonds? %If the yield on 10-year U.S. Treasury bonds is 12 percent, whatis the maturity risk premium between a 10-year bond and a 1-yearbond? %If Delta bonds, scheduled to mature in 10 years, currently sellto yield 14 percent, what is the default risk premium on thesebonds? %If investors in the common stock of Delta require a 15 percentrate of return, what is the seniority risk premium on Delta’scommon stock?
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