A Treasury Bond Due in Two Year Has a Yield

question 112

Multiple Choice

A Treasury bond due in two year has a yield of 2.5%; a Treasury bond due in five years has a yield of 3.9%. A bond issued by Amazon due in five years has a yield of 7.6%; a bond issued by Google due in two year has a yield of 6.4%. The default risk premiums on the bonds issued by Amazon and Google, respectively, are

• A) 4.3% and 3.1%.
• B) 5.4% and 3.2%.
• C) 2.2% and 2.0%.
• D) 3.7% and 3.9%.
• E) None of the options are correct.

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Definitions:

Dozen Oysters

A quantity or unit measure referring to a group of twelve oysters.

Total Utility

The complete satisfaction or utility gained by consuming a certain amount or number of goods or services.

Beers

An alcoholic beverage typically made from water, malted barley, hops, and yeast.

Day

A period of 24 hours as a unit of time, representing the time taken by the Earth to complete one rotation with respect to the sun.