Question: please write a detailed process on how the answers were achieved. thank you! premiums (MRPs) on the two securities; that is, what is MRPS -

please write a detailed process on how the answers were achieved. thank you!

thank you! premiums (MRPs) on the two securities; that is, what is

premiums (MRPs) on the two securities; that is, what is MRPS - MRP3? 6-13 DEFAULT RISK PREMIUM The real risk-free rate, r*, is 2.5%. Inflation is expected to average 2.8% a year for the next 4 years, after which time inflation is expected to average 3.75% a year. Assume that there is no maturity risk premium. An 8-year corporate bond has a yield of 8.3%, which includes a liquidity premium of 0.75%. What is its default risk premium

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