What is the default risk premium on the corporate bond

Assignment Help Financial Econometrics

Reference no: EM13329432

A Treasury bond that matures in 10 years has a yield of 6%. A 10-year corporate bond has a yield of 9%. Assume that the liquidity premium on the corporate bond is 0.5%. What is the default risk premium on the corporate bond?

Reference no: EM13329432

Questions Cloud

Farmers whose crops were destroyed by the floods were much : Farmers whose crops were destroyed by the floods were much worseoff, but farmers whose crops were not destroyed benefited from thefloods, why?

Explain what is the charge on an azide ion : Barium azide is 62.04% Ba and 37.96% N by mass. Assuming that barium exists as its most stable cation in the above compound, what is the molecular formula of barium azide, how many nitrogen atoms compose an azide ion, what is the charge on an azid..

With the unemployment salary at an hourly rate : With the unemployment salary at an hourly rate of $7.25 do youbelieve that this helps our economy, does it hurt oureconomy? Should it be higher as there are other states andcountries that have a higher base salary for unemployment

Define the ph of the buffer after the addition of naoh : What is the pH of this buffer? pH = (b) What is the pH of the buffer after the addition of 0.56 mol of NaOH? (assume no volume change) pH = (c) What is the pH of the original buffer after the addition of 0.30 mol of HI? (assume no volume change) p..

What is the default risk premium on the corporate bond : A Treasury bond that matures in 10 years has a yield of 6%. A 10-year corporate bond has a yield of 9%. Assume that the liquidity premium on the corporate bond is 0.5%.

Evaluate the standard enthalpy of formation of gaseous : Calculate the standard enthalpy of formation of gaseous carbon dioxide (CO2) using the following thermochemical information: 2 C(s) + H2(g) C2H2(g) H = +226.8 kJ 2 C2H2(g) + 5 O2(g) 4 CO2(g) + 2 H2O(l) H = -2599.3 kJ 2 H2O(l) 2 H2(g) + O2(g) H = +..

How many years will it take them to save up the amount : Ralph and Alice would like to have $22000 for a down payment on a house. Their budget only allows them to save $269.37 per month. How many years will it take them to save up the desired amount of $22000

Compute operating income for rim and tip : Compute operating income for RIM and TIP, separately, and the total operating income for both and if the results in part 1 for TIP are typical, why do you believe RIM decided to sell off its interest in TIP?

Often it is claimed that banks create money by making loans : Often it is claimed that banks create money by making loans. How can commercial banks create money? Is the government the only institution that can legally create money?

User Account

All Pages