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A Treasury Bond Due in Two Year Has a Yield

Question 124

Multiple Choice

A Treasury bond due in two year has a yield of 2.5%; a Treasury bond due in five years has a yield of 3.9%. A bond issued by Amazon due in five years has a yield of 7.6%; a bond issued by Google due in two year has a yield of 6.4%. The default risk premiums on the bonds issued by Amazon and Google, respectively, are


A) 4.3% and 3.1%.
B) 5.4% and 3.2%.
C) 2.2% and 2.0%.
D) 3.7% and 3.9%.
E) None of the options are correct.

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