Question: Now it's time for you to practice what you've learned. Suppose the real risk-free rate of interest is r* = 4% and it is expected

Now it's time for you to practice what you've learned. Suppose

Now it's time for you to practice what you've learned. Suppose the real risk-free rate of interest is r* = 4% and it is expected to remain constant over time. Inflation is expected to be 2.00% per year for the next 3 years and 4.50% per year for the next 5 years. The maturity risk premium is 0.1 x (t 11%, where t is number of years to maturity, a liquidity premium is 0.25%, and the default risk premium for a corporate bond is 1.70%. Complete the following table by calculating yields on Treasury and corporate bonds of various maturity. Value The yield on a 4-year Treasury bond The yield on a 4-year corporate bond The yield on a 8-year Treasury bond | 11 The yield on a 8-year corporate bond Expected inflation in 9 years, if the yield on a 9-year Treasury bond is 8.63%

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