Question
The Indian government has 10-year Nominal INR$ bonds outstanding, with a yield to maturity of 8.8% as of September 2013. Currently, the Indian government had
The Indian government has 10-year Nominal INR$ bonds outstanding, with a yield to maturity of 8.8% as of September 2013. Currently, the Indian government had a local currency sovereign rating of BBB-. The typical default spread for BBB- rated country bonds is 2%. The risk-free rate in Nominal INR$ is: Select one: A. The interest rate on a US treasury bond (3.5%) B. The yield to maturity on the 10-year bond - Default spread (6.8%) C. The yield to maturity on the 10-year bond (8.8%) D. The yield to maturity on the 10-year bond + Default spread (10.8%)
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