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You are considering an investment in 30-year bonds issued by Moore Corporation. The bonds have no...

You are considering an investment in 30-year bonds issued by Moore Corporation. The bonds have no special covenants. The Wall Street Journal reports that one-year T-bills are currently earning 0.50 percent. Your broker has determined the following information about economic activity and Moore Corporation bonds:


  Real risk-free rate = 0.42%
  Default risk premium = 1.15%
  Liquidity risk premium = 0.60%
  Maturity risk premium = 0.95%


a.

What is the inflation premium? (Round your answer to 2 decimal places. (e.g., 32.16))


  Inflation premium %


b.

What is the fair interest rate on Moore Corporation 30-year bonds? (Round your answer to 2 decimal places. (e.g., 32.16))


  Fair interest rate %

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