Question

Use Excel to find the solution to the following problems... Suppose the real risk free rate...

Use Excel to find the solution to the following problems...

Suppose the real risk free rate of interest is 3%. Inflation is expected to be 5% for 4 years and then 7% thereafter. The maturity risk premium is 0.1%(t), where t is the number of years until maturity. The default risk premium is 3%. The liquidity premium is 1%. What is the nominal interest rate on a 6 year bond?

Assume the yield on a 6 year treasury bond is 6%. IF the real risk free rate of interest is 4% and the inflation premium is 2.5% then what is the maturity risk premium?

What is the coupon payment for a $2,000 par value bond with a 5% annual coupon and a 8% yield to maturity?

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