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Suppose 10-year A-bonds have a yield of 6% and 10-year corporate bonds yield 7.25%. Also, corporate bonds have a 0.75% liquidity premium versus a zero

Suppose 10-year A-bonds have a yield of 6% and 10-year corporate bonds yield 7.25%. Also, corporate bonds have a 0.75% liquidity premium versus a zero liquidity premium for A-bonds. What is the default risk premium on corporate bonds? A. 0.50% B. 0.60% C. 0.70% D. 0.80%

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