Question
The current 3 months Treasury bill rate is 1.25%, the 30 year Treasury bond rate is 4.55%, the 30 year AAA rated corporate bond rate
The current 3 months Treasury bill rate is 1.25%, the 30 year Treasury bond rate is 4.55%, the 30 year AAA rated corporate bond rate is 7.25% and the inflation rate is 1.1%. XYZ company's bond will be traded in New York Bond Exchange and will have a liquidity premium of 10 basis points. What will be the reasonable estimate of the yield of XYZ's bond?
| 14.25%. | ||
| 7.35%. | ||
| 8.45%. | ||
| 8.25% |
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Fundamentals Of Futures And Options Markets
Authors: John Hull
9th Global Edition
1292422114, 9781292422114
