Determinants of Interest Rate for Individual Securities You are considering an investment in 30-year bonds issued by a corporation. The bonds have no special covenants. The Wall Street Journal reports that 1-year T-bills are currently earning 5.30 percent. Your broker has determined the following information about economic activity and the corporation bonds: Real interest rate = 4.15% Default risk premium = 2.55% Liquidity risk premium = .40% Maturity risk premium = 2.30% What is the inflation premium? What is the fair interest rate on the corporation's 30-year bonds?

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