Suppose the yield on a 30-year corporate bond rated aaa is


Suppose the yield on a 30-year corporate bond rated Aaa is 9.50 percent and the yield on a 30-year Treasury bond is 9.00 percent.What is the default risk premium? Would you expect a higher or lower default risk premium on an A-rated bond?

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Econometrics: Suppose the yield on a 30-year corporate bond rated aaa is
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