coupon has a Z-spread of 300 bps. Assume a flat yield The bond will most 5, A three-year corporate bond with a 6% curve with an interest rate for all maturities of 5% and annual compounding. likely sell: A. close to par. B. at a premium to par. C. at a discount to par. 6. The Z-spread of Bond A is 1.25% and the Z-spread of Bond B is 1.55%. All else equal, which statement best describes the relationship between the two bonds? A. Bond A is safer and will sell at a higher price. B. Bond A is riskier and will sell at a lower price. C. Bond B is riskier and will sell at a higher price. The interest rate tree shown in the figure below will be used for questions 7-10 $100.000 $12.00 $100.000 $12.00 7.1826% 4.5749% $100.000 $12.00 5.3210% 2 years 1 Year Today coupon has a Z-spread of 300 bps. Assume a flat yield The bond will most 5, A three-year corporate bond with a 6% curve with an interest rate for all maturities of 5% and annual compounding. likely sell: A. close to par. B. at a premium to par. C. at a discount to par. 6. The Z-spread of Bond A is 1.25% and the Z-spread of Bond B is 1.55%. All else equal, which statement best describes the relationship between the two bonds? A. Bond A is safer and will sell at a higher price. B. Bond A is riskier and will sell at a lower price. C. Bond B is riskier and will sell at a higher price. The interest rate tree shown in the figure below will be used for questions 7-10 $100.000 $12.00 $100.000 $12.00 7.1826% 4.5749% $100.000 $12.00 5.3210% 2 years 1 Year Today