eBook

A Treasury bond that matures in 10 years has a yield of 5.00%. A 10-year corporate bond has a yield of 8.25%. Assume that the liquidity premium on the corporate bond is 0.50%. What is the default risk premium on the corporate bond? Round your answer to two decimal places.

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eBook

The real risk-free rate is 2.0% and inflation is expected to be 3.75% for the next 2 years. A 2-year Treasury security yields 5.95%. What is the maturity risk premium for the 2-year security? Round your answer to one decimal place.

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The real risk-free rate is 3.00%. Inflation is expected to be 1.75% this year and 4.00% during the next 2 years. Assume that the maturity risk premium is zero.

What is the yield on 2-year Treasury securities? Do not round intermediate calculations. Round your answer to two decimal places.

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What is the yield on 3-year Treasury securities? Do not round intermediate calculations. Round your answer to two decimal places.

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