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    Exam 7: Risk Structure and Term Structure of Interest Rates
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    The Risk Premium
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The Risk Premium

Question 76

Question 76

Multiple Choice

The risk premium


A) is slightly higher on U.S. Treasury securities than on the bonds of large corporations.
B) is not subject to federal income tax.
C) compensates savers both for default risk and for illiquidity of assets.
D) falls whenever illiquidity rises.

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