Sandy has a choice between purchasing $ 5,000 in Treasury bonds paying 7% interest or purchasing $

Question:

Sandy has a choice between purchasing $ 5,000 in Treasury bonds paying 7% interest or purchasing $ 5,000 in BB rated corporate bonds with a rate of 9.2%. What is the risk premium on the BB rated corporate bonds? Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a...