Question: Find the default risk premium for a debt security given the following information: inflation premium 2.5 percent, maturity risk premium = 2.5 percent, real

Find the default risk premium for a debt security given the following information: inflation premium – 2.5 percent, risk premium = 2.5 percent, real rate = 3 percent, liquidity premium = 1.5 percent, and nominal interest rate = 14 percent.

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