Bond ABCD Maturity 2 8 2 Liquidity High High Low 8 Low Based on the table above, what is the default risk premium? 89.5% 0 1% -15% O Default Risk Low High High High YTM 3.50% 5.00% 5.50% 18.00%

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Treasury Market

On-the-run securities are the most recently issued securities in the market depth and are therefore traded at some premium. The off-the-run securities are the ones issued just before the most recent ones. The on-the-run securities have a lower yield to the investor than the off-the-run securities.