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Please explain how to solve these 20) Currently, a 2-year Treasury bond has a yield of I .8% while the yield on a 5-year Treasury
Please explain how to solve these
20) Currently, a 2-year Treasury bond has a yield of I .8% while the yield on a 5-year Treasury bond is 2.8%. What is the risk premium of the typical A-rated 5-year corporate bond with a yield of 4.8%? A) 1.0% B) 1.8% C) 2.0% D) 3.0% 21) What is the price of a coupon bond that has annual coupon payments of $8, a face value of $100, a yield to maturity of 4%, and a maturity of two years? A) $98.84 B) $96.70 C) $102.92 D) $107.70
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