Question
A 10-year bond rated BBB might have a lower yield than a 10-year bond rated A because: A. Credit ratings estimate default probability, rather than
A 10-year bond rated BBB might have a lower yield than a 10-year bond rated A because:
A. Credit ratings estimate default probability, rather than loss severity
B. The bonds are denominated in different currencies
C. There is a high level of investor demand for the BBB-rated obligor
D. All of the above
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Principles of Managerial Finance
Authors: Lawrence J. Gitman, Chad J. Zutter, Wajeeh Elali, Amer Al Roubaix
Arab World Edition
1408271583, 978-1408271582
