What is the default risk premium on corporate bonds

Assignment Help Econometrics

Reference no: EM13200804

Suppose 10-year T-bonds have a yield of 5.30% and 10-year corporate bonds yield 6.75%. 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?

Reference no: EM13200804

Questions Cloud

What is the opportunity cost of the trip to costa rica : You can either spend spring break working at home in Alabama for $200 a day for five days, or you can spend the week in Costa Rica where travel expenses will total $700 (food, hotel, and a plane ticket.)

How large will the annual dividend be in five years : You believe the dividend will increase by 3.5 percent each year indefinitely. Round answers to two decimal places and how large will the annual dividend be in five years?

Define an equation that represents the outside edge : Write an equation that represents the outside edge of the exercise ring. The equation of the outside edge of the racetrack is . Sketch the outside edge of the racetrack on the graph.

What is the measurement in standard units : Another day it only took the student 12 minutes to get to class. What is the measurement in standard units (Hint: remember that a standard unit is a z score)?

What is the default risk premium on corporate bonds : Suppose 10-year T-bonds have a yield of 5.30% and 10-year corporate bonds yield 6.75%. 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.

Make a system of two equations : Set up a system of linear equations to describe the following problem and solve the system using one of the methods discussed this week. At the end of the year, a business has made a profit of $151,000.

The stages of economic growth : One of the stages of economic growth is capital intensive, where wealth is created throught the efficient use of money and industrial manufacturing occurs. what latin american country fits into this stage and why.

How should the string be cut so that the sum : A 25-inch piece of string is cut into two pieces. One piece is used to form a circle and the other to form a square. How should the string be cut so that the sum of the areas is a minimum? Round to the nearest tenth, if necessary.

How many years will the initial investment be doubled : Suppose that is invested at an interest rate of per year, compounded continuously. After how many years will the initial investment be doubled? Round your answer to two decimal places.

User Account

All Pages