Quantitative Problem: An analyst evaluating securities has obtained the following information. The real rate of interest is 2.9% and is expected to remain constant for the next 5 years. Inflation is expected to be 2.2% next year, 3.2% the following year, 4.2% the third year, and 5.2% every year thereafter. The maturity risk premium is estimated to be 0.1 (t 1)%, where t = number of years to maturity. The liquidity premium on relevant 5-year securities is 0.5% and the default risk premium on relevant 5-year securities is 1%. a. What is the yield on a 1-year T-bill? Round your intermediate calculations and final answer to two decimal places. %

b. What is the yield on a 5-year T-bond? Round your intermediate calculations and final answer to two decimal places. %

c. What is the yield on a 5-year corporate bond? Round your intermediate calculations and final answer to two decimal places. %

An analyst evaluating secunties has obtained the folowing information. I he real rate of interest is 2.9% and is expected to remain constant for the next 5 years. Inflation is expected to be 2.2% next year, 3.2% the following year, 4.2% the third year, and 5.2 every year thereafter. The matunty nsk premium ts estimated to be 0.1 x (t-1)% where t number of years to matunty. The liquidity premium on relevant 5-year secur tesis 0.596 and the default nsk premium on relevant 5-year secundes is 1%. a. What is the yield on a 1-year T-bil Round your intermediate calculations and final answer to two decimal places. b. what is the yield on 5-year T-bond? Round your intermediate calculations and final answer to two decimal places. c. what is the yeld on 5 year corporate bond? Round your intermediate calculations nd final answer to two decimal places