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In February 2018, Aaa bonds yielded 3.43%, Baa bonds yielded 4.56%, and Treasuries with the same maturities yielded 2.91%. a. What was the credit spread
In February 2018, Aaa bonds yielded 3.43\%, Baa bonds yielded 4.56\%, and Treasuries with the same maturities yielded 2.91%. a. What was the credit spread on Aaa bonds? b. What was the spread on Baa bonds? c. What do you think would be the difference in price (as a percent of face value) between a typical 9% Treasury bond and a similar Baa bond? Assume annual coupons. Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 3 decimal places for requirements a and b and to 2 decimal places for requirement c. Answer is complete but not entirely correct. In February 2018, Aaa bonds yielded 3.43\%, Baa bonds yielded 4.56\%, and Treasuries with the same maturities yielded 2.91%. a. What was the credit spread on Aaa bonds? b. What was the spread on Baa bonds? c. What do you think would be the difference in price (as a percent of face value) between a typical 9% Treasury bond and a similar Baa bond? Assume annual coupons. Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 3 decimal places for requirements a and b and to 2 decimal places for requirement c. Answer is complete but not entirely correct
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