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General Motors (GM) experiences a downgrade in their corporate bond rating from BBB- to BB+ which causes a change i n the YTM of their
General Motors (GM) experiences a downgrade in their corporate bond rating from BBB- to BB+ which causes a change i n the YTM of their callable bonds. These bonds have 20 years to maturity, are callable in 10 years, and pay an 8% coupon annually. Their YTC increased from 9% to 11% and GM pays a 10% call premium. How did the downgrade affect GMs YTM?
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