P69: Risk premiums In January 2016, Anheuser-Busch issued an outstanding bond that pays a 3.3% coupon rate, matures in January 2023, and has a yield to maturity of 2.82%. In January 2017, Santander Holdings issued an outstanding bond that pays a 3.571% coupon rate, matures in January 2023, and has a yield to maturity of 3.341%.

1. Does the Anheuser-Busch bond sell at a premium, at par, or at a discount? How do you know? What about the Santander bond?

2. Which bond would you guess has a higher rating? Why?

3. Can you draw any conclusion about the shape of the yield curve, either now or when these bonds were first issued, from the information given in the problem?Why or why not?