A particular securitys equilibrium rate of return is 8, Financial Management

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A particular securitys equilibrium rate of return is 8

A particular security’s equilibrium rate of return is 8 percent. For all securities, the inflation risk premium is 1.80 percent and the real risk-free rate is 3.4 percent. The security’s liquidity risk premium is 0.45 percent and maturity risk premium is 0.85 percent. The security has no special covenants. Calculate the security’s default risk premium.

Default risk premium % --------------

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Financial Management: A particular securitys equilibrium rate of return is 8

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Financial Management: A particular securitys equilibrium rate of return is 8

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