Winsorized mean - Study guides, Class notes & Summaries

CFA SALT TEST SOLUTIONS (100% Accurate) CFA SALT TEST SOLUTIONS (100% Accurate) A company is able to borrow over 5 years at a 5.7% interest rate. If the nominal risk-free rate is 4% and lenders require premiums of 1% for inflation, 0.8% for liquidity, and 0.4% for maturity, the compensation for the possibility that the company does not repay the loan is closest to: - ANSWER - Remember r = rf + I + D + L + M Nominal risk free rate = rf + I = 4%. I = 1% L = 0.8% M= 0.4% So 5.7 = 4 + D...