Question
A Treasury bond that matures in 9 years has a yield of 7 percent. A 9-year corporate bond has a yield of 9 percent. Assume
A Treasury bond that matures in 9 years has a yield of 7 percent. A 9-year corporate bond has a yield of 9 percent. Assume that the liquidity premium on the corporate bond is 1 percent. What is the default risk premium on the corporate bond?
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Bond Markets Analysis and Strategies
Authors: Frank J.Fabozzi
9th edition
133796779, 978-0133796773
