Question
The following table summarizes the yields to maturity on several one-year, zero-coupon securities: Security Yield (%) Treasury 3.07 AAA corporate 3.14 BBB corporate 4.13 B
The following table summarizes the yields to maturity on several one-year, zero-coupon securities:
| Security | Yield (%) |
| Treasury | 3.07 |
| AAA corporate | 3.14 |
| BBB corporate | 4.13 |
| B corporate | 4.89 |
First, please read this question carefully and do not answer past questions instead. This question has been shortened.
a. What is the credit spread on AAA-rated corporate bonds?
b. What is the credit spread on B-rated corporate bonds?
c. How does the credit spread change with the bond rating? Why?
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QFinance The Ultimate Resource
Authors: Various Authors
1st Edition
1849300003, 978-1849300001
