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The return provided by Treasury bonds is considered as risk-free return and provides a basis to compare the return offered by corporate bonds. Refer to

The return provided by Treasury bonds is considered as risk-free return and provides a basis to compare the return offered by corporate bonds. Refer to Figure 14.3, which shows yields to maturity for corporate bonds for different maturities and default rat- ings. Calculate the spread to Treasury for a BBB-rated bond for two years and for seven years. Why do the bonds with same credit rating offer different spread to Trea- sury for different periods

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