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Assume you make the following investments . A $10,000 investment in a 10-year T-bond that yields 5.50%, and A $20,000 investment in a 10-year corporate
Assume you make the following investments . A $10,000 investment in a 10-year T-bond that yields 5.50%, and A $20,000 investment in a 10-year corporate bond with an AA rating and a yield of 6.70% Based on this information, and the knowledge that the difference in liquidity risk premiums between the two bonds is 0.30%, what is your estimate of the corporate bond's default risk premium? 1.26% 1.20% 0.90% 1.53%
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