Question: please help 20 eBook A 5-year Treasury bond has a 5.1% yield. A 10-year Treasury bond yields 6.5%, and a 10-year corporate bond yields 10.0%.

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20 eBook A 5-year Treasury bond has a 5.1% yield. A 10-year Treasury bond yields 6.5%, and a 10-year corporate bond yields 10.0%. The market expects that inflation will average 2.6% over the next 10 years (IP10 2.6%). Assume that there is no maturity risk premium (MRP 0) and that the annual real risk-free rate, r", will remain constant over the next 10 years. (Hint: Remember that the default risk premium and the liquidity premium are zero for Treasury securities: DRP = LP0.) A 5-year corporate bond has the same default risk premium and liquidity premium as the 10-year corporate bond described. What is the yield on this 5-year corporate bond? Round your answer to one decimal place. %

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