Question: Intro 1 0 - year Treasury - bonds yield 4 . 2 % and 1 0 - year corporate bonds yield 7 . 1 5

Intro
10-year Treasury-bonds yield 4.2% and 10-year corporate bonds yield 7.15%. The
maturity risk premium on both 10-year Treasury and corporate bonds is 1.3%. Corporate
bonds have a 0.65% liquidity premium, while T-bonds have a zero liquidity premium.
Part 1
Attempt 13 for 10 pts.
What is the default risk premium on corporate bonds?
Intro 10-year Treasury-bonds yield 4.2% and 10-year corporate bonds yield 7.15%.

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