Solved: What is the default risk premium on the corporate bond, Accounting Basics

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What is the default risk premium on the corporate bond

Problem:

The [real] risk-free rate is 3%. Inflation is expected to average 2% a year for the next three years and then 4% a year for the following three years. A six year corporate bond has a yield of 8%. What is the default risk premium on the corporate bond?

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Accounting Basics: What is the default risk premium on the corporate bond

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