Question: PLEASE answer fully and fill in the blanks. Also, point out the answer clearly. Please zoom in 4-7: The Pre-Tax Cost of Debt: Determinants of

 PLEASE answer fully and fill in the blanks. Also, point outthe answer clearly. Please zoom in 4-7: The Pre-Tax Cost of Debt:

PLEASE answer fully and fill in the blanks. Also, point out the answer clearly. Please zoom in

4-7: The Pre-Tax Cost of Debt: Determinants of Market Interest Rates Problem 4-23 Determinants of Interest Rates Suppose you and most other investors expect the inflation rate to be 6% next year, to fall to 5% during the following year, and then to remain at a rate of 3% thereafter. Assume that the real risk-free rate, r*, will remain at 2% and that maturity risk premiums on Treasury securitics risc from zero on very short-term securities (those that mature in a few days) to a level of 0.2 percentage points for 1yar securities. Furthermorc, maturity risk premiums increase 0.2 percentage points for each year to maturity, up to a limit of 1.0 percentage point on 5-year or longer-term T-notes and T-bonds. a. Caleulate the interest rate on 1-year Treasury securities. Round your aswer to two decimal places Calculate the interest rate on 2-year Treasury securities. Round your answer to two decimal places Calculate the interest rate on 3-year Treasury securities. Round your answer to two decimal places. Calculate the interest rate on 4-year Treasury securities. Round your answer to two decimal places Iculate the interest rate on 5-year Treasury securities. Round your answer to two decimal places Calculate the interest rate on 10-ycar Treasury securities. Round your answer to two decimal places Calculate the interest rate on 20-year Treasury securities. Round your answer to two decimal places

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