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1. What is the maturity risk premium of a 20 year bond? 2. What is the default risk premium for a CCC rated bond? 3.
1. What is the maturity risk premium of a 20 year bond?
2. What is the default risk premium for a CCC rated bond?
3. What should be the price of a 3 year BB bond that pays a semi-annual coupon of 4.4% ?
4. What should the coupon rate be, if a company wants to issue 10 year semi-annual bonds. The company is CCC rated.
5. A company has issued 5 year BB bonds that pay a semi-annual coupon of 4.4%. The company has financial difficulty and the bonds are downgraded to CCC. What was the change in the price of the bond?
*bonds pay a semi annual coupon
*bond chart attached
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