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Check TB MC Qu. 6-5 Determinants of Interest Rate for Individual Securities A... Determinants of Interest Rate for Individual Securities A Corporation's 10-year bonds have

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Check TB MC Qu. 6-5 Determinants of Interest Rate for Individual Securities A... Determinants of Interest Rate for Individual Securities A Corporation's 10-year bonds have an equilibrium rate of return is 10.00 percent. For all securities, the inflation risk premium is 1.61 percent and the real interest rate is 3.11 percent. The security's liquidity risk premium is 26 percent and maturity risk premium is 81 percent. The security has no special covenants. What is the bond's default risk premium? Multiple Choice

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