Question: Beech Nut Inc received a loan for two years at 12%. The pure rate is 2%, and the company's has a default risk premium of

Beech Nut Inc received a loan for two years at 12%. The pure rate is 2%, and the company's has a default risk premium of 2.8% and a liquidity risk premium of 1.4%. The maturity risk premium for two-year loans is 1%. Inflation is expected to be 3% in year 1 . What does the interest rate model imply the lender expects the inflation rate to be in the year 27 Round your answer to one decimal place. Write \% sign in your

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