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90-day Treasury bills 8.36 percent 180-day Treasury bills 8.48 percent 2-year Treasury notes 9.10 percent 3-year Treasury notes 9.25 percent 90-day Commercial paper 9.15 percent

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90-day Treasury bills 8.36 percent 180-day Treasury bills 8.48 percent 2-year Treasury notes 9.10 percent 3-year Treasury notes 9.25 percent 90-day Commercial paper 9.15 percent 3-year Corporate bonds (AA) 10.10 percent 3-year Municipal (AA) 7.07 percent Expected 2-year inflation rate 3.50 percent With reference to the data above, which security below did the market view as having the greatest default risk A. 3-year Corporate bonds (AA) B. 3-year Treasury securities OC. 90-day Treasury securities OD. 90-day Commercial paper 90-day Treasury bills 8.36 percent 180-day Treasury bills 8.48 percent 2-year Treasury notes 9.10 percent 3-year Treasury notes 9.25 percent 90-day Commercial paper 9.15 percent 3-year Corporate bonds (AA) 10.10 percent 3-year Municipal (AA) 7.07 percent Expected 2-year inflation rate 3.50 percent With reference to the data above, what is the default risk premium on a 3-year Corporate Bond (AA)? O A. 1.00% B. 1.74% 0.79% OC. OD. 0.85% A bondholder in the 25 percent tax bracket owns a $1000 Treasury bond with a 6 percent coupon rate. What bond? the after-tax return on the A. 6 percent B. 4.5 percent OC.5.2 percent OD. 1.5 percent

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