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What is the default risk premium on one year bank loans

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Following is interest rate information currently being observed by the Electronic Publishing Corporation:
One-year U.S. government securities .... 4.5%
One-year bank loans ............ 6.0%
Five-year U.S. government securities .... 7.0%
Five-year bank loans ............ 9.5%

A. What is the amount of the maturity risk premium on one-year versus five-year U.S. government securities?
B. What is the amount of the maturity risk premium on one-year versus five-year bank loans?
C. What is the default risk premium on one-year bank loans and on five-year bank loans?

Reference no: EM131123682

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