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A Treasury Bond Due in One Year Has a Yield

Question 19

Multiple Choice

A Treasury bond due in one year has a yield of 2.5%; a Treasury bond due in ten years has a yield of 4.1%. A bond issued by Amazon due in ten years has a yield of 9.5%; a bond issued by Google due in one year has a yield of 7.3%. The default risk premiums on the bonds issued by Amazon and Google, respectively, are


A) 3.7% and 3.1%.
B) 4.3% and 5.4%.
C) 5.4% and 4.8%.
D) 6.6% and 7.9%.
E) None of the options are correct.

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