Yield on bond is 7% and market required return is 14% then market risk premium would be

The correct answer is A. 2.00%.

The market risk premium is

the additional return that investors demand for holding risky assets over risk-free assets. It is calculated as the difference between the expected return on a risky asset and the risk-free rate of return.

In this case, the yield on the bond is 7% and the market required return is 14%. Therefore, the market risk premium is 2.00%.

Option B is incorrect because it is the yield on the bond, not the market risk premium.

Option C is incorrect because it is the difference between the market required return and the yield on the bond, which is equal to the market risk premium.

Option D is incorrect because it is the yield on the bond, not the market risk premium.