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Problem 6-4 Default Risk Premium A Treasury bond that matures in 10 years has a yield of 5%. A 10-year corporate bond has a yield

Problem 6-4 Default Risk Premium

A Treasury bond that matures in 10 years has a yield of 5%. A 10-year corporate bond has a yield of 9.5%. Assume that the liquidity premium on the corporate bond is 0.4%. What is the default risk premium on the corporate bond? Round your answer to two decimal places.

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