Question: Estimate the default premium and the maturity premium given the following three investment opportunities: a Treasury bill with a current interest rate of 3.25%; a

Estimate the default premium and the maturity premium given the following three investment opportunities: a Treasury bill with a current interest rate of 3.25%; a Treasury bond with a twenty-year maturity and a current interest rate of 6%; and a AAA, corporate bond with a twenty-year maturity and an interest rate of 9.5%.

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