A Treasury Bond Due in Two Year Has a Yield

question 96

Multiple Choice

A Treasury bond due in two year has a yield of 3.5%; a Treasury bond due in five years has a yield of 4.2%. A bond issued by Amazon due in five years has a yield of 8.6%; a bond issued by Google due in two year has a yield of 6.9%. The default risk premiums on the bonds issued by Amazon and Google, respectively, are

• A) 3.3% and 2.1%.
• B) 4.4% and 3.4%.
• C) 1.2% and 1.0%.
• D) 8.6% and 6.9%.
• E) None of the options are correct.

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