A Treasury Bond Due in One Year Has a Yield

A Treasury bond due in one year has a yield of 6.3% while a Treasury bond due in 5 years has a yield of 8.8%. A bond due in 5 years issued by High Country Marketing Corporation has a yield of 9.6% while a bond due in one year issued by High Country Marketing Corporation has a yield of 6.8%. The default risk premiums on the one-year and 5-year bonds issued by High Country Marketing Corp. are respectively ________ and ________.

A) 0.4%, 0.3%
B) 0.4%, 0.5%
C) 0.5%, 0.5%
D) 0.5%, 0.8%

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