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Mamadee2478
Apr 10, 2009, 06:51 PM
How do you find the default risk premium when 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 liguidity premium on the corporate bond is 0.5%. What is the default risk premium on the corporate bond?

Is there a formula for this?