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QUESTION
A Treasury bond that matures in 10 years has a yield of 4. A 10-year corporate bond has a yield of 8. Assume that the liquidity premium on the...
A Treasury bond that matures in 10 years has a yield of 4.25%. A 10-year corporate bond has a yield of 8.75%. Assume that the liquidity premium on the corporate bond is 0.25%. What is the default risk premium on the corporate bond? Round your answer to two decimal places.
