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TB MC Qu. 6-5 Determinants of Interest Rate for Individual Securities A... Determinants of Interest Rate for Individual Securities A Corporation's 10-year bonds have an

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TB MC Qu. 6-5 Determinants of Interest Rate for Individual Securities A... Determinants of Interest Rate for Individual Securities A Corporation's 10-year bonds have an equilbrium rate of return is 10.00 percent. For all securities, the inflation risk premium is 169 percent and the real interest rate is 3.19 percent. The security's liquidity risk premium is 34 percent and maturity risk premium is 89 percent. The security has no special covenants. What is the bond's default risk premium? Multiple Choice 3.89 o 12.73 2.00 a 6

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