Question: Chapter 6 HW 30 points Saved Help Save & Exit Submit Check my work Problem 6-2 Determinants of Interest Rates for Individual Securities (LG6-6) points

Chapter 6 HW 30 points Saved Help Save & Exit Submit Check my work Problem 6-2 Determinants of Interest Rates for Individual Securities (LG6-6) points You are considering an investment in 30-year bonds issued by Moore Corporation. The bonds have no special covenants. The Wall Street Journal reports that 1-year T-bills are currently earning 2.25 percent. Your broker has determined the following information about economic activity and Moore Corporation bonds: Skipped eBook Real risk-free rate = 0.85% Default risk premium = 2.15% Liquidity risk premium = 1.40% Maturity risk premium = 2.75% Hint References a. What is the inflation premium? (Round your answer to 2 decimal places.) Expected IP % b. What is the fair interest rate on Moore Corporation 30-year bonds? (Round your answer to 2 decimal places.) Fair interest rate

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