Suppose 10-year T-bonds have a yield of 5-30% and 10-year corporate bonds yield 6.65%. Also, corporate...

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Suppose 10-year T-bonds have a yield of 5-30% and 10-year corporate bonds yield 6.65%. Also, corporate bonds have a 0.25% liq

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Answer 1

Answer #1

d. 1.10%

Default risk premium = 6.65% - 5.30% - 0.25%

Default risk premium = 1.10%

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Answer 2

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