Details of this Paper

A particular security?s default risk premium is 2...

Description

Solution


Question

A particular security?s default risk premium is 2 percent. For all securities, the inflation risk premium is 1.75 percent and the real interest rate is 3.5 percent. The security?s liquidity risk premium is 0.25 percent and maturity risk premium is 0.85 percent. The security has no special covenants. Calculate the security?s equilibrium rate of return. (Round your answer to 2 decimal places.)

 

Paper#11903 | Written in 18-Jul-2015

Price : $25
SiteLock