Question: Currently, a one - year Treasury bill is yielding 2 . 7 percent. Company F ' s three - year bond has a yield equal
Currently, a oneyear Treasury bill is yielding percent. Company Fs threeyear bond has a yield equal to percent, and its sevenyear bond has a yield equal to percent. Although none of the bonds has a liquidity premium, any bond with a maturity equal to one year or longer has a maturity risk premium MRP Except for their terms to maturity, the characteristics of the bonds are the same.
Compute the annual MRP associated with the bonds. Round your answer to one decimal place.
Compute the default risk premium DRP associated with the bonds. Round your answer to one decimal place.
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