Compute What is the default premium

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Estimate the default premium and the maturity premium given the following three investment opportunities: a Treasury bill with a current interest rate of 2.25%; a Treasury bond with a twenty-year maturity and a current interest rate of 5.75%; and a AAA, corporate bond with a twenty-year maturity and an interest rate of 9?%.

Problem 1: What is the default premium?

Reference no: EM132719230

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