Question: Keys Corporation's 5 - year bonds yield 7 . 0 0 0 , and 5 - year T - bonds yield 5 . 9 5

Keys Corporation's

5 -

year bonds yield

7.000,

and

5 -

year T

-

bonds yield

5.95 % .

The only difference between the two bonds, which are both eatremely marketable and liquid is the chance of bankruptcy. What is the default risk premium

(

DRFI on Keys' bonds?"

100 %

5.95 % .

1.05 % .

200 % .

Keys Corporation's 5 - year bonds yield 7 . 0 0 0

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