In 20XX, the 10-Year Treasury Rate Was 4

question 24

Multiple Choice

In 20XX, the 10-year Treasury rate was 4.5 percent while the average 10-year Aaa corporate bond debt carried an interest rate of 6.0 percent. What is the average default risk premium on Aaa corporate bonds?

• A) 0.75 percent
• B) 1.5 percent
• C) 1.95 percent
• D) 2.25 percent

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Definitions:

Variables

Elements, characteristics, or conditions that can change or vary within a study, potentially influencing the outcome.

Negative Number

A number less than zero, indicating a lack or subtraction in mathematics.

Pearson Correlation

A statistical measure that calculates the strength and direction of the linear relationship between two quantitative variables.

Pearson Correlation

A measure of linear correlation between two variables, ranging from -1 to 1, where 1 means a perfect positive linear relationship, -1 means a perfect negative linear relationship, and 0 indicates no linear relationship.