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Assume that interest rates on 5-year Treasury and 5-year IBM AAA corporate bonds are as follows: T-bond =3.72% IBM AAA =4.72% IBM bond is traded

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Assume that interest rates on 5-year Treasury and 5-year IBM AAA corporate bonds are as follows: T-bond =3.72% IBM AAA =4.72% IBM bond is 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 Two of (1), (2), (3), and (4) (2) (3) (4) (1)

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