Question: Default risk premium. At present, 20 year Treasury bonds are yielding 4.6 percent while some 20 year corporate bonds that you are interested in are

Default risk premium. At present, 20 year Treasury bonds are yielding 4.6 percent while some 20 year corporate bonds that you are interested in are yielding 8.6 percent. Assuming that the maturity risk premium on both bonds is the same and that the liquidity risk premium on the corporate bonds is 0.32percent while it is 0 percent on the treasury bonds. What is the default risk premium on the corporate bonds. Note that a treasury secu should have no default risk premium

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