A Treasury bond due in two year has a yield of 3.5%; a Treasury bond due in five years has a yield of 4.2%. A bond issued by Amazon due in five years has a yield of 8.6%; a bond issued by Google due in two year has a yield of 6.9%. The default risk premiums on the bonds issued by Amazon and Google, respectively, are

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The default risk premium is calculated by subtracting the yield of a Treasury bond of the same maturity from the yield of the corporate bond. For Amazon, it's 8.6% - 4.2% = 4.4%. For Google, it's 6.9% - 3.5% = 3.4%.

A Treasury Bond Due in Two Year Has a Yield