Calculating

the default-risk

premium)

At present, 10-year Treasury bonds are yielding

4.1%

while a 10-year corporate bond is yielding

6.2%.

If the liquidity-risk premium on the corporate bond is

0.4%,

what is the corporate bond's default-risk premium? Note that a Treasuty security should have no default-risk premium and liquidity-risk premium.

The corporate bond's default-risk premium is