Following is interest rate information currently being observed by the Electronic Publishing Corporation: One-year U.S. government securities

Question:

Following is interest rate information currently being observed by the Electronic Publishing Corporation:
One-year U.S. government securities .... 4.5%
One-year bank loans ............ 6.0%
Five-year U.S. government securities .... 7.0%
Five-year bank loans ............ 9.5%

A. What is the amount of the risk premium on one-year versus five-year U.S. government securities?
B. What is the amount of the risk premium on one-year versus five-year bank loans?
C. What is the default risk premium on one-year bank loans and on five-year bank loans?

Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...