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Corporate Bond Yield Rate Spread = DRP + LP U.S. Treasury 0.83 % AAA corporate 0.93 0.10 % AA corporate 1.31 0.48 A corporate 1.69
Corporate Bond Yield | ||||
Rate | Spread = DRP + LP | |||
U.S. Treasury | 0.83 | % | ||
AAA corporate | 0.93 | 0.10 | % | |
AA corporate | 1.31 | 0.48 | ||
A corporate | 1.69 | 0.86 |
What yield would you predict for each of these two investments? Round your answers to three decimal places.
12-year Treasury yield: %
7-year Corporate yield: %
Based on the information about the corporate bond provided in part b, calculate yields and then construct a new yield curve graph that shows both the Treasury and the corporate bonds. Round your answers to two decimal places.
Years | Treasury yield | AA-corporate yield | ||
1 | 5.37 | % | ||
2 | 5.47 | % | ||
3 | 5.62 | % | ||
4 | 5.68 | % | ||
5 | 5.61 | % | ||
10 | 5.71 | % | ||
20 | 6.34 | % | ||
30 | 5.92 | % |
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