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( Default - risk premium ) At present, 2 0 - year Treasury bonds are yielding 4 . 9 % 4 . 9 % while

(Default-risk premium) At present, 20-year Treasury bonds are yielding 4.9%4.9% while some20-year corporate bonds that you are interested in are yielding 9.6%9.6%. Assuming that the maturity-risk premium on both bonds is the same and that the liquidity-risk premium on the corporate bonds is 0.25%0.25% while it is 0.0%0.0% on the Treasury bonds, what is the default-risk premium on the corporate bonds? Note that a Treasuty security should have no default-risk premium.

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