1. What is the nominal spread of this bond?

2. What is your required rate of return for this bond?

3. What is the yield to maturity of the benchmark Treasury security?

4. What is the Z-spread of this bond?

5. Using the nominal spread and the Z-spread, tell me whether this bond is undervalued or overvalued? Will you buy it?

127.939/128.430 Cor Settings Yield and Spread Analysis 3.277/3.221 BMRK (d 2/17 95 Buy 96 Sell D Yield & Spread Graphs Pricing Custom IBM 4 Description 10/30/25 459 200AM3 Risk workout L OAS Spread 80.62 bp vs 10y 2 02/15/27 Price 6.776 128.4 6.703 98-17 12:59:48 OM.Dur ODur Yield 8.851 3.220816 Wst 2.714650 ISA Risk 8.756 wkout 10/30/202 100.00 Consensus 0.567 0.557 Convexit Settle 02/23 17 885 876 02/21/17 on 1MM 8.894 8.752 Benchmark Risk 1,000 M 995 M Risk Hedge 1,325 M Proceeds Hedge Spreads ield Calculations nvoice 11) G-sprd 89.0 Street Convention 12) I-Sprd 91.2 Equiv 1 1,000 3.220816 Face 1,284,300.00 Principal 3.246750 13) Basis 19.0 Mmkt (Act/ 360 Accrued (113 Days) 21,972.22 14) Z-Sprd 96.1 True Yield 3,219696 Total (USD) 1,306,272.22 15) ASW 108.5 Current Yield 5.450 16) 0AS 95.4 17) TED 83.9 SN 647022 EST GMT-5 oo H5zz-2494-o zo-Feb-zo17 13 oot 27