Question
31. A bonds credit rating provides a guide to its price. In the fall of 2017 Aaa bonds yielded 3.6% and Baa bonds yielded 4.3%.
31. A bonds credit rating provides a guide to its price. In the fall of 2017 Aaa bonds yielded 3.6% and Baa bonds yielded 4.3%. If some bad news causes a 10% five-year bond to be unexpectedly downrated from Aaa to Baa, what would be the effect on the bond price? (Assume annual coupons.)
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International Project Finance
Authors: Felix I. Lessambo
1st Edition
3030963896, 978-3030963897
