1. What is the default risk premium on 30-year AAA corporate bonds? Assume there exist liquid markets for AAA corporate bonds.
2. (TRUE or FALSE?) According to the doctrine of reasonable expectations, courts interpret contracts as would a person who is trained in the law.
a. FALSE
b. TRUE
3. John made an investment for four years. After four years he obtained a total amount of $20,736 from his bank. If interest rate was 20% per year, what was his interest on interest?