Find default risk premium on corporate bonds

Assignment Help Finance Basics

Reference no: EM1352726

Suppose 10-year T-bonds have a yield of 5.30% and 10-year corporate bonds yield 6.80%. Also, corporate bonds have a 0.25% liquidity premium versus a zero liquidity premium for T-bonds, and the maturity risk premium on both Treasury and corporate 10-year bonds is 1.15%. What is the default risk premium on corporate bonds?
1.16%
1.25%
1.56%
1.08%
1.43%

Reference no: EM1352726

Questions Cloud

What rate reported by statistics canada every month : Which of the following is NOT a shortcoming of the civilian unemployment rate reported by Statistics Canada every month.

Calculate the maturity risk premium : Kelly Corporation five year bonds yield 7.50% and 5-year T-bonds yield 5.80%. The real risk-free rate is r* = 2.5%, the default risk premium for Kelly's bonds is DRP = 0.40 percent,

Illustrations of language aphasias : What are some examples of language aphasias? How do language aphasias help physiological psychologists understand the production and comprehension of language?

Program to use a stack to represent list of workers : Write a program to simulate this process. Use the following guidelines.- Use a stack to represent the list of workers. Use a queue to represent the list of people waiting to work.

Find default risk premium on corporate bonds : Assume 10-year T-bonds have a yield of 5.30% and ten year corporate bonds yield 6.80%. Also, corporate bonds have a 0.25% liquidity premium versus a zero liquidity premium for T-bonds,

Cognitive development-influence on language acquisition : Cognitive development in the brain has the largest influence on language acquisition, because variations in the initial brain structure can make qualitative differences in language acquisition.

What does this normally mean upward-sloping supply curves : If a price in a competitive market is "too high to clear the market," what does this normally mean. Assume upward-sloping supply curves.

First instruction executed if we start machine with counter : Suppose the memory cells at addresses 00 through 02 contain the following bit patterns. What would be the first instruction executed if we start the machine with its program counter containing 00?

Determine nominal annual rate of return : Carter's preferred stock pays a dividend of $1.00 per quarter. If the value of the stock is $57.50, determine its nominal annual rate of return?

User Account

All Pages