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  • Sep 20, 2008, 12:23 PM
    ichapman
    Default risk premium
    Say a t-bond that matures in 10 years has a yield of 6 percent. A 10 year corp bond has a yield of 8 percent. Assume that the liquidity premium on the corp bond is 0.5 percent. What is the default risk premium on the corp bond?
  • Mar 27, 2010, 11:39 AM
    shazia mustafa

    I don't understand clearly
  • Mar 28, 2010, 12:07 AM
    morgaine300

    The thread is old so it doesn't matter. It's also homework, and it would make perfect sense to someone who understands that class. (Though it might not make much sense to a lot of investors.)

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