A treasury bond due in one year has a yield of 2.40% while a treasury bond due in 5 years has a yield of 4.50%. A bond due in one year issued by High Country Marketing Corporation has a yield of 5.06% while a bond due in 5 years issued by High Country Marketing Corporation has a yield of 6.54%. The default risk premiums on the one-year and 5-year bonds issued by High Country Marketing Corp. are respectively __________ and __________. Group of answer choices A. 2.66% and 2.04% B. 3.32% and 2.88% C. 2.89% and 2.47% D. 3.25% and 2.83% E. 2.71% and 2.29%
A treasury bond due in one year has a yield of 2.40% while a treasury bond due in 5 years has a yield of 4.50%. A bond due in one year issued by High Country Marketing Corporation has a yield of 5.06% while a bond due in 5 years issued by High Country Marketing Corporation has a yield of 6.54%. The default risk premiums on the one-year and 5-year bonds issued by High Country Marketing Corp. are respectively __________ and __________. Group of answer choices A. 2.66% and 2.04% B. 3.32% and 2.88% C. 2.89% and 2.47% D. 3.25% and 2.83% E. 2.71% and 2.29%
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 3EB: Smashing Cantaloupes Inc. issued 5-year bonds with a par value of $35,000 and an 8% semiannual...
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A treasury bond due in one year has a yield of 2.40% while a treasury bond due in 5 years has a yield of 4.50%. A bond due in one year issued by High Country Marketing Corporation has a yield of 5.06% while a bond due in 5 years issued by High Country Marketing Corporation has a yield of 6.54%. The default risk premiums on the one-year and 5-year bonds issued by High Country Marketing Corp. are respectively __________ and __________.
Group of answer choices
A. 2.66% and 2.04%
B. 3.32% and 2.88%
C. 2.89% and 2.47%
D. 3.25% and 2.83%
E. 2.71% and 2.29%
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