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Bond Yield

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If 10-year T-bonds have a yield of 5.2%, 10-year corporate bonds yield 7.5%, the maturity risk premium on all 10-year bonds is 1.1%, and corporate bonds have a 0.2% liquidity premium versus a zero liquidity premium for T-bonds, what is the default risk premium on the corporate bond?

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The solution does a great job of answering the question. The solution is brief and concise and very easy to follow along. It can be easily understood by anyone with a basic understanding of Finance. Overall, an excellent solution.

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