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A corporate bond with 10 years to maturity yields 6.8%, while Treasury notes of the same maturity yield 2.4%. The corporate bond has a liquidity

A corporate bond with 10 years to maturity yields 6.8%, while Treasury notes of the same maturity yield 2.4%. The corporate bond has a liquidity premium of 0.5%.

Part1

What is the default risk premium on the corporate bond?

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