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A Treasury bond that matures in 1 0 years has a yield of 5 . 2 5 % . A 1 0 - year corporate

A Treasury bond that matures in 10 years has a yield of 5.25%. A 10-year corporate bond has a
yield of 7.00%. Assume that the liquidity premium on the corporate bond is 0.30%. What is the
default risk premium on the corporate bond? Round your answer to two decimal places.
%
The real risk-free rate is 2.0% and inflation is expected to be 3.75% for the next 2 years. A 2-year Treasury security yields 6.95%. What is the maturity risk premium for the 2-year security? Round your answer to one decimal place.

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