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Consider the following hypothetical bond information: The current yield on a 10-year Treasury security is 2.2% The current yield on a 1-year Treasury bill is

Consider the following hypothetical bond information:

  1. The current yield on a 10-year Treasury security is 2.2%
  2. The current yield on a 1-year Treasury bill is 0.7%
  3. The current yield on a Baa-rated corporate bond with 10 years to maturity is 4.5%
  4. The current yield on an A-rated corporate bond with 10 years to maturity is 2.8%

Given this information, which response most accurately completes the following statement:

The current default premium on the Baa-rated bond is ____________ and the term premium is _______________.

2.3%; 1.5%

1.5%; 2.3%

1.7%; 2.3%

1.7%, 1.5%

2.8%; 2.3%

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