If the government budget deficit rises, explain the impact on the risk premia of corporate bonds.
As the supply of government (risk-free) bonds increases, the yields on those bonds rise, reducing the risk premia for corporate bonds.

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The Answer of If the government budget deficit rises, explain the impact on the risk premia of corporate bonds.
As the supply of government (risk-free) bonds increases, the yields on those bonds rise, reducing the risk premia for corporate bonds.

If the Government Budget Deficit Rises, Explain the Impact on the Risk