The real risk-free rate, r, is 1.4%. Inflation is expected to average 1.3 a year for...
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The real risk-free rate, r, is 1.4%. Inflation is expected to average 1.3 a year for the next 4 years, after which time inflation is expected to average 4.2% a year, Assume that there is no maturity risk premium. An 11-year corporate bond has a yield of 9.4%, which includes a liquidity premium of 0.3%. What is its default risk premium? Do not round intermediate calculations. Round your answer to two decimal places. The real risk-free rate, r, is 1.4%. Inflation is expected to average 1.3 a year for the next 4 years, after which time inflation is expected to average 4.2% a year, Assume that there is no maturity risk premium. An 11-year corporate bond has a yield of 9.4%, which includes a liquidity premium of 0.3%. What is its default risk premium? Do not round intermediate calculations. Round your answer to two decimal places.
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