Question: If the current yield for AAA rated corporate bonds is 6%, the current yield for AAA rated municipal bonds is 5.2%, the current yield for
If the current yield for AAA rated corporate bonds is 6%, the current yield for AAA rated municipal bonds is 5.2%, the current yield for AA rated corporate bonds is 5.5%, the current yield for AA rated municipals is 4%, the current 10-year Treasury Bond yield is 3.7%, and the current US T-Bill rate is 1.3%, then what is the risk premium for AA rated corporate bonds?
A) 1.8%
B) 2.7%
C) 1.5%
D) 4.2%
E) 4.7%
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