The yield on a treasury bond is given as 216 a comparable


1. An investment returns a nominal value of 6.52% when the rate of inflation is 1.75%. Calculate the real risk free rate for this investment with the full formula and as an approximation. How much is the difference between the 2 approaches.

2. The yield on a treasury bond is given as 2.16%. A comparable corporate bond has a yield of 3.47%. What is the yield spread in basis points?

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Financial Management: The yield on a treasury bond is given as 216 a comparable
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