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2, A Treasury bond that matures in 10 years has a yield of 5%. A 10-year corporate bond has a yield of 8%. Assume that
2, A Treasury bond that matures in 10 years has a yield of 5%. A 10-year corporate bond has a yield of 8%. Assume that the liquidity premium on the corporate bond is 0.7%. What is the default risk premium on the corporate bond? Round your answer to one decimal place.
3, The real risk-free rate is 3%, and inflation is expected to be 2% for the next 2 years. A 2-year Treasury security yields 6.0%. What is the maturity risk premium for the 2-year security? Round your answer to one decimal place.
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