Question: Fidelity Bank has a bond maturing in 20 2 5 trading at a rate of return of 7 .5 %, the Government of The Bah

Fidelity Bank has a bond maturing in 2025 trading at a rate of return of 7.5%, the Government of The Bahamas has a bond maturing in 2025 with a rate of return of the Prime lending rate (assume this is 4.00%). Assuming that there is no Liquidity Risk, what Premiums could explain this difference in their coupon rates?

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