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jesshalavi jesshalavi
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A year ago
Crockett Corporation’s 6-year bonds yield 7.95%, and 6-year government bonds yield 5.45%. The real risk-free rate is r* = 3.10%, the default risk premium for Crockett’s bonds is DRP = 1.10% versus zero for T-bonds, the liquidity premium on Crockett’s bonds is LP = 1.4%, and the maturity risk premium for all bonds is found with the formula MRP = (t – 1)×0.1%, where t = number of years to maturity. What is the inflation premium (IP) on 6-year bonds?


▸

1.35%



▸

1.50%



▸

1.70%



▸

1.85%

Textbook 
Financial Management: Theory and Practice

Financial Management: Theory and Practice


Edition: 4th
Authors:
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jojoliciouzjojoliciouz
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A year ago
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Thanks for your help!!
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this is exactly what I needed
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