Calculate table of interest rates for 5years based on info

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Reference no: EM13328340

Calculate a table of interest rates for 5 years based on the following information:

• The pure interest rate is 2%

• Inflation expectations for year 1 = 3%, year 2 =4%, years 3-5 =5%

• The default risk is .1% for year one and increases by .1% over each year

• Liquidity premium is 0 for year 1 and increases by .2% each year

• Maturity risk premium is 0 for years 1 and 2 and .3% for years 3-5

Reference no: EM13328340

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