Assume you make the following investments:

	A $10,000 investment in a 10-year T-bond that yields 9.00%, and
	A $20,000 investment in a 10-year corporate bond with an A rating and a yield of 10.70%

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 bonds default risk premium?

1.40%

1.70%

1.96%

2.38%