**Determinants of Interest Rate for Individual Securities**A particular security's default risk premium is 3.10 percent. For all securities, the inflation risk premium is 2.10 percent and the real interest rate is 2.30 percent. The security's liquidity risk premium is 0.80 percent and maturity risk premium is 1.00 percent. The security has no special covenants. What is the security's equilibrium rate of return?

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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