Question: Ch 03: Assignment - Bonds, Bonds Valuation, and interest Rates You heard that rating agencies have downgraded a bond's rating. The yield on the bond

Ch 03: Assignment - Bonds, Bonds Valuation, and interest Rates You heard that rating agencies have downgraded a bond's rating. The yield on the bond is likely to increase decrease y , and the bo Assume you make the following investments: A $10,000 investment in a 10-year T-bond that yields 9.00%, and A $20,000 investment in a 10-year corporate bond with an AA rating and a yield of 10.20% Based on this information, and the knowledge that the difference in liquidity risk premiums between the two bonds is 0.30%, wh the corporate bond's default risk premium? 1.20% 1.26% 1.53% 0.90% Grade IL NOW

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