A 5-year long-term corporate bond yields 10%. The real risk-free rate is 2%. Inflation is forecasted to average 2% a year for the next 5 years. The maturity risk premium is estimated to be 1%(t-3), where t is the maturity of the bond. How much is the combined liquidity and default risk premium of the 5-year long-term corporate bond?

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Q: bonds

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