Question
The market yield on a callable, below investment grade corporate bond is 7.25%. The OAS is 500 bps. The option premium equates to 50 bps
The market yield on a callable, below investment grade corporate bond is 7.25%. The OAS is 500 bps. The option premium equates to 50 bps per year. The yield on a Treasury bond with a similar maturity and duration profile to the corporate bond is 1.5%. What is the liquidity premium as an annualized cost?
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International Finance The Markets And Financial Management Of Multinational Business
Authors: Maurice D. Levi
3rd Edition
0070376875, 978-0070376878
