A bond has an expected return of 15.33%, sensitivity to the term factor of 1.95 and to

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A bond has an expected return of 15.33%, sensitivity to the term factor of 1.95 and to the default factor of 0.65. The current term risk premium is 3.01%. The risk-free rate of return is 3%.

What is the default risk premium if no arbitrage opportunities exist?

Related Book For answer-question

Fundamentals of Financial Management

ISBN: 978-0324664553

Concise 6th Edition

Authors: Eugene F. Brigham, Joel F. Houston

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Posted Date: May 18, 2023 02:46 AM

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A bond has an expected return of 15.33%, sensitivity to the term factor of 1.95 and to

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Fundamentals of Financial Management

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