What is the default risk premium on this bond

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1. The YTM on a 10-year corporate bond is 11.6%. The real risk-free rate of interest is 3%. Inflation is expected to be a constant 4% for the foreseeable future. If the MRP is 0.1%(t – 1) and the liquidity premium is 0.5%, what is the default risk premium on this bond?

2. 8 years ago you started making annual deposits of $377 into an account paying 6% annual return. You continue to make these deposits every year without fail. If you keep doing this every year for the next 6 years, how much money will you have in 6 years?

3. Today you deposit $5 thousand into an account paying 4% APR compounded daily. How much money will you have in the account 12 years from now?

Reference no: EM132007470

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