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E-Finance Chapter / Exercise 2 Following is interest rate information currently being observed by the Electronic Publishing Corporation: - One-year U.S. government securities 4.5% -
E-Finance Chapter / Exercise 2 Following is interest rate information currently being observed by the Electronic Publishing Corporation: - One-year U.S. government securities 4.5% - One-year bank loans 6.0% - Five-year U.S. government securities 7.0% - Five-year bank loans 9.5% A) What is the amount of the maturity risk premium on one-year versus five-year U.S. government securities? B) What is the amount of the maturity risk premium on one-year versus five-year bank loans? C) What is the default risk premium on one-year bank loans and on five-year bank loans? Answers are percent (\%) - please enter as numbers with one decimal and no percent sign
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