Solved: Find the default risk premium on the corporate bond, Finance Basics

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Find the default risk premium on the corporate bond

Question:

If 10-year T-bonds have a yield of 6.2%, 10-year corporate bonds yield 8.5%, the maturity risk premium on all 10-year bonds is 1.3%, 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?

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Finance Basics: Find the default risk premium on the corporate bond

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Finance Basics: Find the default risk premium on the corporate bond

Reference No:- TGS02055982

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