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stephanchery posted a question Jul 05, 2012 at 10:35pm
P6–8 Risk-free rate and risk premiums:

The real rate of interest is currently 3%; the inflation expectation and risk premiums for a number of securities follow.

*** Please See Attachment for Table***

a. Find the risk-free rate of interest, RF, that is applicable to each security.

b. Although not noted, what factor must be the cause of the differing risk-free rates found in part a?

c. Find the nominal rate of interest for each security.
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Expert answered the question Jul 06, 2012 at 10:03am
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P68 Risk-free rate and risk premiums:
The real rate of interest is currently 3%; the inflation expectation and risk premiums for a number of
securities follow.
*** Please See Attachment for...