question archive If 10-year T-bonds have a yield of 6
If 10-year T-bonds have a yield of 6
Subject:BusinessPrice: Bought3
If 10-year T-bonds have a yield of 6.2%, 10-year corporate bonds yield 15.8%, the maturity risk premium on all 10-year bonds is 3.1%, and corporate bonds have a 0.4% liquidity premium versus a zero liquidity premium for T- bonds, what is the default risk premium on the corporate bond? O a) 1.90% b) 2.09% Oc) 2.30% O % d) 2.53% O e) None of the above
