What is the default risk premium on the corporatebond

Reference no: EM13331703

1. A Treasury Bond that matures in 10 years has a yield of 6percent. A 10-year corporate bond has a yield of 8 percent. Assume that the liquidity premium onthe corporate bond is 0.5%. What is the default risk premium on the corporatebond?

2.The real risk-free rate is 3%, and inflation is expected to be 3%for the next 2 years. A 2-year treasury security yields 6.2%. What is the maturity riskpremium for the 2-year security?

Reference no: EM13331703

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