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( Default - risk premium ) At present, 2 0 - year Treasury bonds are yielding 4 . 9 % 4 . 9 % while
Defaultrisk premium At present, year Treasury bonds are yielding while someyear corporate bonds that you are interested in are yielding Assuming that the maturityrisk premium on both bonds is the same and that the liquidityrisk premium on the corporate bonds is while it is on the Treasury bonds, what is the defaultrisk premium on the corporate bonds? Note that a Treasuty security should have no defaultrisk premium.
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