Five-year Treasury bonds are yielding 4.5% and a five-year corporate bond is yielding 7.5%. If the corporate bonds yield includes a 0.8% liquidity premium and a 1.7% maturity risk premium, what is its default risk premium?

Question 13 options:

A)

1.0%

B)

1.6%

C)

0.5%

D)

2.2%

E)

2.9%