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Question 1 0 Use the following information to answer the question ( s ) below. Consider the following information regarding corporate bonds: Nielson Motors plans

Question 10
Use the following information to answer the question(s) below.
Consider the following information regarding corporate bonds:
Nielson Motors plans to issue 10-year bonds that it believes will have an BBB rating. Suppose AAA bonds
with the same maturity have a 4.1% yield. Assume that the market risk premium is 4% and the expected loss
rate in the event of default on the bonds is 73%. The yield that these bonds will have to pay during a
recession is closest to (%)(2 decimal places):
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