1. Treasury bond that matures in 10 years has a yield of 5.5%. A 10-year corporate bond has a yield of 7% Assume that the liquidity premium on the corporate bond is 0.5%. What is the default risk premium on the corporate bond?
2. Morin Company's bonds sell for $903.04, have a par value of $1,000, and make an annual coupon interest payments of $65. The market requires an interest rate of 8.2% on these bonds. How much longer do these bonds have until maturity?