Question
Tiger Insurance company has invested in two securities a) a 15 year Treasury Bond yielding 6.20%, and b) a 15 year Doc Motors A rated
Tiger Insurance company has invested in two securities a) a 15 year Treasury Bond yielding 6.20%, and b) a 15 year Doc Motors A rated Corporate bond for which the default risk premium for a comparable security is 1.1% and the liquidity premium is .35%.The inflation premium is 3.5%. for a 15 year security.What is the yield for the Doc Motors 15 year A rated Corporate bond?
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Financial Markets and Institutions
Authors: Frederic S. Mishkin, Stanley G. Eakins
5th edition
321280299, 321280296, 978-0321280299
