Question: An analyst is estimating the expected return on a 5 - year corporate bond using a build - up approach. The following data is provided:

An analyst is estimating the expected return on a 5-year corporate bond using a build-up approach. The following data is provided: Expected inflation rate: 2.5% Risk-free rate (5-year Treasury yield): 3.0% Term premium: 0.8% Credit spread for similar-rated corporates: 1.5% Liquidity premium: 0.4% Dividend yield on S&P 500: 1.6% Real GDP growth estimate: 1.9% Based on this information, what is the expected return on the corporate bond? Group of answer choices 5.7%5.2%4.9%

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