Question: A particular securitys equilibrium rate of return is 9 percent. For all securities, the inflation risk premium is 3.65 percent and the real risk-free rate

A particular securitys equilibrium rate of return is 9 percent. For all securities, the inflation risk premium is 3.65 percent and the real risk-free rate is 2.1 percent. The securitys liquidity risk premium is 0.85 percent and maturity risk premium is 1.05 percent. The security has no special covenants. Calculate the securitys default risk premium.

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