3.) Ross Dinosaur Company's bonds mature in 10 years, have a par value of $1,000,...
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3.) Ross Dinosaur Company's bonds mature in 10 years, have a par value of $1,000, and make an annual coupon interest payment based on an annual coupon rate of 6.5%. The market requires an interest rate of 5.24% on these bonds. What is the bond's price?
The difference between the yields of long-term bonds and the yields of short-term bonds issued by the same corporation at the same time is usually caused by the difference in maturities (maturity risk premium). (True/False) True False Question 2 (4 points) If 10-year T-bonds have a yield of 6.2%, 10-year corporate bonds yield 7.9%, the maturity risk premium on all 10-year bonds is 1.3%, and corporate bonds have a 0.4% liquidity premium versus a zero liquidity premium for T-bonds, what is the default risk premium on the corporate bond? (Multiple Choice) 1.46% 1.51% 1.60% 1.30% 0%
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