Academic Integrity: tutoring, explanations, and feedback — we don’t complete graded work or submit on a student’s behalf.

he following yields on 20 year bonds prevailed in January for the three securiti

ID: 2697575 • Letter: H

Question

he following yields on 20 year bonds prevailed in January for the three securities shown:

Aa-rated corporate bond 9.98% Baa-rated corporate bond 10.34% B-rated corporate bond 11.12%
The difference in yields is due primarily to Answer a. financial risk premium b. maturity risk premium c. seniority risk premium d. default risk premium he following yields on 20 year bonds prevailed in January for the three securities shown:

Aa-rated corporate bond 9.98% Baa-rated corporate bond 10.34% B-rated corporate bond 11.12%
The difference in yields is due primarily to 9.98% 10.34% 11.12% financial risk premium maturity risk premium seniority risk premium default risk premium Aa-rated corporate bond 9.98% Baa-rated corporate bond 10.34% B-rated corporate bond 11.12%

Explanation / Answer

default risk premium d. default risk premium