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:

Identify Cases

The process of pinpointing and examining specific instances within a dataset or research study that are relevant to the investigation.

Variable

An element, feature, or factor that is liable to vary or change.

Characteristic

A feature or quality belonging typically to a person, place, or thing and serving to identify it.

Categorical Variables

Variables that represent types or categories that can be named or labeled without implying any numerical order.