Finance

TB MC Qu. 6-20 Determinants of Interest Rate for Individual Securities The Wall... Determinants of interest Rate for Individual Securities The Wall Street Journal reports that the current rate on 10-year Treasury bonds is 760 percent, on 20 year Treasury bonds is 8.10 percent, and on a 20-year corporate bond is 10.20 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. Multiple Choice 10,73 10.20% 8.63%