Question: 4. You have determined the following data for a given bond: Real risk-free rate = 2% Inflation premium = 8% Default risk premium = 3%

4. You have determined the following data for a given bond:

Real risk-free rate = 2%

Inflation premium = 8%

Default risk premium = 3%

Liquidity premium = 2%

Maturity risk premium = 1%

What is the interest rate on long-term (long maturity) Treasury securities, or T-bonds, of the relevant maturity? (5 points)

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