Question: A 5-year Treasury bond has a 3.75% yield. A 10 -year Treasury bond yields 6.55%, and a 10 -year corporate bond yieids 9.6%. The market

A 5-year Treasury bond has a 3.75% yield. A 10 -year Treasury bond yields 6.55%, and a 10 -year corporate bond yieids 9.6%. The market expects that inflation will average 3.6% over the next 10 years (IP 10=3.6% ). Assume that there is no maturity risk premium (MRP =0 ) and that the annual real riskfree rate, p, will remain constant over the next 10 years. (Hint: Remember that the default risk premium and the liquidity premium are zero for Treasury The data has been collected in the Microsoft Excel Oniline file below. Open the spreadsheet and perform the required analysis to answer the question below. Open spreadsheet What is the yield on this 5-year corporate bond? Round your answer to two decimal places. Formulas Real risk-free rate, r \#N/A Inflation premium over 5 years (IP5) \#N/A DRP10+LP10 \#N/A 5-year Corporate yield (C5) \#N/A

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