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6-4 DEFAULT RISK PREMIUM A 10-year corporate bond has a yield of 8.75%. Assume that the liquidity premium on the corporate bond is 0.35%. What

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6-4 DEFAULT RISK PREMIUM A 10-year corporate bond has a yield of 8.75%. Assume that the liquidity premium on the corporate bond is 0.35%. What is the default risk premium on the corporate bond? MATURITY RISK PREMIUM The real risk-free rate is 2 5% and inflation is expected to be A Treasury bond that matures in 10 years has a yield of 5.75%

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