The following premiums apply to an 8-month bond: interest rate risk premium = 0.32 percent; liquidity premium = 0.44 percent; default premium = 1.15 percent; inflation premium = 2.44 percent; real rate = 3.20 percent. What is the expected nominal interest rate on an 8- month risky security given these values?

Answer rating: 100% (QA)

The expected nominal interest rate on an 8month risky security can be calculated as the sum ... View the full answer