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What is the default risk premium of treasury bond

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Question: The 15 year Treasury bonds are yielding 3.75% while a 15 year AAA rated corporate bond yields 6.25%. If the liquidity premium on this corporate bond is 0.75%, what is the default risk premium of Treasury Bond?

A. 1.75%.

B. 0%.

C. 2.50%.

D. 3.25%.

Reference no: EM131528619

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