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Find the compensation rate for default risk as an annual

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Reference no: EM132701766

The annual effective interest rate that takes into account both default risk and inflation is 7.26%, the compensation for deferred consumption is 4% annual effective, and the annual effective rate of inflation is 2%.

Problem 1: Find the compensation rate for default risk as an annual effective rate.

A 1.11%

B 1.18%

C 1.24%

D 1.26%

E 1.28%

Reference no: EM132701766

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