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A Corporate Bond That Yields 12 Percent Includes a Risk-Free

Question 64

Multiple Choice

A corporate bond that yields 12 percent includes a risk-free rate of 7 percent and a default risk premium of 3 percent. The bond's maturity risk premium is _____. 


A) 1 percent
B) 10 percent
C) 4 percent
D) 2 percent
E) 6 percent

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