$1\%.$

a$.$ What is the yield on a $1-$year T$-$bill? Do not round intermediate calculations. Round your answer to one decimal place.

$\%$

Hide Feedback

Correct

v Check My Work Feedback

Review the individual components that determine the market interest rate.

Determine the components that are relevant for calculating the ST T$-$bill yield.

Calculate the relevant inflation premium to use in the ST T$-$bill yield.

Realize that the formula given for the MRP will be zero for the ST T$-$bill.

Realize that the ST T$-$bill yield does not include a default or liquidity risk premium.

b$.$ What is the yield on a $5-$year T$-$bond? Do not round intermediate calculations. Round your answer to one decimal place.

$\%$

Fide Feedback

Incorrect

Check My Work Feedback

Review the individual components that determine the'market interest rate.

Determine the components that are relevant for calculating the $5-yr$ T$-$bond yield.

Calculate the relevant inflation premium to use in the $5-yr$ T$-$bond yield. Realize that it will be the average of expected inflation over the life of the security.

Realize that the $5-yr$ T$-$bond yield will include a maturity risk premium that is calculated using the formula given in the problem.

Realize that the $5-$yr T$-$bond yield does not include a default or liquidity risk premium.

c$.$ What is the yield on a $5-$year corporate bond? Do not round intermediate calculations, Round your answer to one decimal place.

$$

$\%$