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A finance company invests in 10 year AA rated corporate bonds. This is its only asset on its balance sheet. The Finance company is rated
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A finance company invests in 10 year AA rated corporate bonds. This is its only asset on its balance sheet. The Finance company is rated AA. It finances its assets with 80% debt that matures in 1 year and with equity. The interest rate spread between the companys assets and liabilities is positive. If short term rates begin to rise the interest rate spread will decline and could become negative.
Base your answer on market data. Finra.org is a good source of market data. Look in the Market Data Center.
True
False
A finance company invests in 10 year AA rated corporate bonds. This is its only asset on its balance sheet. The Finance company is rated AA. It finances its assets with 80% debt that matures in 1 year and with equity. The interest rate spread between the companys assets and liabilities is positive. If short term rates begin to rise the interest rate spread will decline and could become negative.
Base your answer on market data. Finra.org is a good source of market data. Look in the Market Data Center.
True
False
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