A Corporate Bond is currently priced at equilibrium in the market. Which of the following statements is false?

Multiple Choice

• The yield-to-maturity on the Corporate Bond is greater than the yield on any Treasury security.

• The yield-to-maturity on the Corporate Bond equals the rate required by investors for the risks involved in owning the security.

• The yield-to-maturity on the Corporate Bond covers the premiums required for Default Risk and Interest Rate Risk.

• All of the above are true statements.

• The yield-to-maturity on the Corporate Bond is greater than the yield of the risk-free asset.