Question: Sandy has a choice between purchasing $5,000 in Treasury bonds paying 6.9% interest or purchasing $5,000 in BB-rated corporate bonds with a coupon rate of

Sandy has a choice between purchasing $5,000

in Treasury bonds paying 6.9% interest or purchasing $5,000

in BB-rated corporate bonds with a coupon rate of 9.3%.

What is the risk premium on the BB-rated corporate bonds?

The risk premium on the BB-rated corporate bonds is _____%.

(Round to one decimal place.)

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