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Assume that interest rates on 5-year Treasury and 10-year ABC Company AAA bonds are as follows: T-bond = 3.72% ABC AAA = 4.52% ABC Company's

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Assume that interest rates on 5-year Treasury and 10-year ABC Company AAA bonds are as follows: T-bond = 3.72% ABC AAA = 4.52% ABC Company's bond is not traded on the exchange. The difference in these rates were probably caused primarily by: (1) Liquidity premium: (2) Default risk premium; (3) Maturity risk premium: (4) Inflation premium 13. 21 and 3

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