Question: ( Calculating the default-risk premium ) At present, 10-year Treasury bonds are yielding 3.6% while a 10-year corporate bond is yielding 6.2%. If the liquidity-risk
(Calculating the default-risk premium) At present, 10-year Treasury bonds are yielding 3.6% while a 10-year corporate bond is yielding 6.2%. If the liquidity-risk premium on the corporate bond is 0.8%, what is the corporate bond's default-risk premium? Note that a Treasuty security should have no default-risk premium and liquidity-risk premium.
The corporate bond's default-risk premium is %. (Round to one decimal place.)
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