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Interpolation method
Consequently, r denotes required rate of return
Consequently, r = 14 percent + (15 percent - 14 percent) x 253 .646 /253 .646 + 5.375
= 14 percent + 0.98 percent
= 14.98 percent
Term Structure of Interest Rates The term structure of interest rate give details the relationship between the term to maturity and interest rates and the differences between
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