What is the default premium

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Problem 1: A twelve-year corporate bond is yielding 4.8% per year and twelve-year Treasury bonds are yielding 4.2% per year. If the corporate bond's yield includes a 0.2% per year liquidity premium and a 0.3% per year maturity premium, what is its default premium?

1) 0.3%

2) 0.2%

3) 0.4%

4) 0.5%

5) 0.6%

Reference no: EM132653105

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