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Suppose 2 Year treasury note yields are 2 % , and GE's default risk premium is 3 % and its liquidity premium is 0 .

Suppose

2

Year treasury note yields are

2 %,

and GE's default risk premium is

3 %

and its liquidity premium is

0.5 % .

What would be the required return on GE's

2 -

Year bonds?

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