Atpresent, 10-year Treasury bonds are yielding 4.3 4.3 % while a10-year corporate bond is yielding 6.2 6.2
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Question:
Atpresent, 10-year Treasury bonds are yielding 4.3
4.3% while a10-year corporate bond is yielding 6.2
6.2%. If theliquidity-risk premium on the corporate bond is 0.4
0.4%, what is the corporatebond's default-riskpremium? Note that a Treasuty security should have nodefault-risk premium andliquidity-risk premium.
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