A-Z Kay Corporation's 5-year bonds yield 5.90% and 5-year T-bonds yield 4.40%. The real risk-free...
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A-Z Kay Corporation's 5-year bonds yield 5.90% and 5-year T-bonds yield 4.40%. The real risk-free rate ist - 25%, the inflation premium for 5-year bands is IP = 1,50%, the default risk premium for Kay's bonds is DRP = 1,30% versus zero for T-bonds, and the maturity risk premium for all bonds is found with the formula MRP - (1 - 1) * 0.1%, where t = number of years to maturity. What is the liquidity premium (LP) on Kay's bonds? O 0.19% 6.0.25% O.0.20% 8.0.17 0.0.2 . + 14 15 - Ostonas
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