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Answer:
From the given data we find thr formula for MRP as
MRP = (t - 1) * 0.10%, where t = number of years to
maturity
MRP= (6 - 1) * 0.10%
MRP= 0.50%
Yield on 6-year Bonds = Real Risk-free Rate + Inflation Premium
+ Default Risk Premium + Liquidity Premium + Maturity Risk
Premium
Yield on 6-year Bonds = 2.80% + 1.00% + 0.85% + 1.20% + 0.50%
Yield on 6-year Bonds = 6.35%
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