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eBook A Treasury bond that matures in 10 years has a yield of 5.25%. A 10-year corporate bond has a yield of 9.25%. Assume th
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Answer #1

rate positively ..

Given that
i Corporate bond yield 9.25%
ii Liquidity premium 0.30%
iii Treasury bond yield = 5.25%
iv=i-ii-iii Default risk premium 3.70%
ans = 3.70%
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