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1. The nominal interest rate is 2%. a) What are the maturity risk premium, liquidity risk premium and default risk premium? b) What is the

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1. The nominal interest rate is 2%. a) What are the maturity risk premium, liquidity risk premium and default risk premium? b) What is the YTM of bond D? Default Risk YTM Bond B . I Maturity Long Short Liquidity High High Low Low High 3.0% 3.5% Short Low 4.0% D Long Low High 1. The nominal interest rate is 2%. a) What are the maturity risk premium, liquidity risk premium and default risk premium? b) What is the YTM of bond D? Default Risk YTM Bond B . I Maturity Long Short Liquidity High High Low Low High 3.0% 3.5% Short Low 4.0% D Long Low High

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