Question

Remalning Time: 54 minutes, 38 seconds. Question Completlon Status For the next 4 questions suppose the following data on yields from WSJ holds: 3-month T-B 30-year T-Bond 30-year AAA Corporato 30-year Municipal what is the real risk free rate for 3-month if the inflation for 3 months is estimated as 3.0%? 50% 7.2% | 8.6% 6.02% 1.8% o 2.0% 2.2% О 24% 0 2.6% QUESTION 34 What is the maturity risk premium on 30 year Treasury bonds? Assume the expected inflation for 3-month T Bills and 30-year T-Bonds are the same. 0.896 1.0% 1.2% Click Save and Submit to save and submit. Ctick Save All Ansuwers to saue all anstwers. Save Al Answe F4 FS F6 F7 FS 19
These 4 questions are grouped together. Could use assistance with these "4"

Answer 1

33.

real risk free rate for 3-month

=nominal risk free rate for 3-month - inflation rate

=5.0%-3.0%

=2.0%

34.

maturity risk premium on 30-year treasury bond

=rate of 30-year treasury bond - rate of 3 month t-bill

=7.2%-5.0%

=2.2%

because there is no default as well as liquid risk in both and also inflation is same, so only difference is due to the maturity risk premium

35.

default risk premium on 30 year corporate bonds

=rate of 30 year corporate bonds-rate of 30-year treasury bond

=8.6%-7.2%

=1.4%

there is no maturity difference, also liquidity is there for both, so only difference is default risk as calculated above directly

36.

implied marginal tax rate

=1-(6.02%/8.6%)

=30%

the above is answer..