Given the interest rate component information below, determine the yield on a 5 year, A-rated bond. Show in percent to one decimal point without the percent sign. e.g. 3.1% would be 3.1 Real Rate 1.6% Inflation 4.5% 5 year Maturity Risk Premium 2.0% 10 year Maturity Risk Premium 3.0% AA Default Risk Premium 0.8% A Default Risk Premium 1.8%

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter4: Bond Valuation
Section: Chapter Questions
Problem 22P: Yield to Maturity and Yield to Call Arnot International’s bonds have a current market price of...
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Given the interest rate component information below, determine the yield on a 5 year, A-rated bond.

Show in percent to one decimal point without the percent sign. e.g. 3.1% would be 3.1

Real Rate 1.6%
Inflation 4.5%
5 year Maturity Risk Premium 2.0%
10 year Maturity Risk Premium 3.0%
AA Default Risk Premium 0.8%
A Default Risk Premium 1.8%

 

 

 

 

1 year Treasury rates are 4%, while 2 year Treasury rates are 6%.  What is the expected 1 year Treasury rate one year from today?

answer format: show your answer to one decimal places. If your answer is, for example, 3.252%, then input 3.3 without the percent sign.

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