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Must be in Excel format and you need to write down all necessary steps/formulas leading to...

Must be in Excel format and you need to write down all necessary steps/formulas leading to your results

Suppose the real risk-free rate is 3.50%, the average future inflation rate is 2.25%, a maturity premium of 0.08% per year to maturity applies, i.e., MRP = 0.08%*t, where t is the years to maturity. Suppose also that a liquidity premium of 0.5% and a default risk premium of 0.85% applies to A-rated corporate bonds. How much higher would the rate of return be on a 10-year A-rated corporate bond than on a 5-year Treasury bond?

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SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE12 e 2 * 9 w ? v . 1 ENG 02:58 02-03-2020 25 - XV fx А B C D E F G H I J K L M 2 risk free rate = r* 3 inflation =IP 4 MRP 5

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