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QUESTION 20 A Treasury bond due in one year has a yield of 4.2%; a Treasury bond due in five years has a yield of

QUESTION 20

A Treasury bond due in one year has a yield of 4.2%; a Treasury bond due in five years has a yield of 6%. A bond issued by Lucent Technologies due in five years has a yield of 8.9%; a bond issued by Exxon due in one year has a yield of 6.2%. What will be the default risk premiums on the bonds issued by Exxon and Lucent Technologies?

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