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    ichapman's Avatar
    ichapman Posts: 1, Reputation: 1
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    #1

    Sep 20, 2008, 12:23 PM
    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?
    shazia mustafa's Avatar
    shazia mustafa Posts: 2, Reputation: 1
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    #2

    Mar 27, 2010, 11:39 AM

    I don't understand clearly
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
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    #3

    Mar 28, 2010, 12:07 AM

    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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