. Determinants of Interest Rate for Individual Securities The Wall Street Journal reports that the current rate on 10-year Treasury bonds is 6.95 percent, on 20-year Treasury bonds is 7.45 percent, and on a 20-year corporate bond is 8.90 percent. Assume that the maturity risk premium is zero. If the default risk premium and liquidity risk premium on a 10-year corporate bond is the same as that on the 20-year corporate bond, what is the current rate on a 10-year corporate bond.

7.77% A

9.22% B

8.90% C

8.40% D