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A Treasury bond that matures in 10 years has a yield of 5.5 percent. A 10-year corporate bond has a yield of 8.5 percent. Assume

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A Treasury bond that matures in 10 years has a yield of 5.5 percent. A 10-year corporate bond has a yield of 8.5 percent. Assume that the liquidity premium on the corporate bond is 0.75 percent. What is the default risk premium on the corporate bond? 0 1.5% 0 2.75% 0 2.25% 1.95% None

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