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5. The table below gives current information on the interest rates for two 2-year and two 8-year maturity investments and info on the maturity, liquidity,
5. The table below gives current information on the interest rates for two 2-year and two 8-year maturity investments and info on the maturity, liquidity, and default risk characteristics. Investment Liquidity Default Risk Interest Rate Maturity (in Years) 12 2 7 8 8 High Low Low High Low Low Low Low Low High 2.0 2.5 R3 4.0 6.5 Calculate the liquidity premium using the rates from Investment 1 and Investment 2. Estimate the default risk premium
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