ing Enabled: Exam $3($Chapters $6-8)(1)$

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A particular security$\text{'}$s default risk premium is $3$ percent. For all securities$,$ the inflation risk premium is $1\mathrm{.}75$ percent and the real interest rate is $4\mathrm{.}2$ percent. The security$\text{'}$s liquidity risk premium is $0\mathrm{.}35$ percent and maturity risk premium is $0\mathrm{.}95$ percent. The security has no special covenants. Calculate the security$\text{'}$s equilibrium rate of return.

Multiple Choice

$8\mathrm{.}50$ percent

$10\mathrm{.}25$ percent

$6\mathrm{.}05$ percent

$9\mathrm{.}90$ percent

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