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Based on Table 7, what is the default risk premium? Investment Maturity Liquidity Default Risk Interest...

Based on Table 7, what is the default risk premium?

Investment Maturity Liquidity Default Risk Interest Rate
1 2 High Low 3.00%
2 2 Low Low 3.72
3 7 Low Low 4.72
4 8 High Low 5.54
5 8 Low High 7.04

Table 7

A. 0.78%

B. 0.82%

C. 1.50%

D. 0.72%

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Answer #1

Ans is A. 0.78%

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