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Use the following Treasury curve and forecast data: 1yr:3.0% 2 yr: 3.2% 3 yr: 3.5% 4 yr: 3.6% 5 yr: 3.8% 7 yr: 3.9% 10
Use the following Treasury curve and forecast data: 1yr:3.0% 2 yr: 3.2% 3 yr: 3.5% 4 yr: 3.6% 5 yr: 3.8% 7 yr: 3.9% 10 yr: 4.0% 7 yr TIPS: 0.8% Investor survey for average of short-term rates over the next 3 years: 3.1% Investor survey for average of short-term rates over the next 7 years: 3.4% Investor survey for average of short-term rates over the next 10 years: 3.4% 1) A 5-year corporate bond has a coupon of 3.0%, paid semi-annually, and trades at a yield 4.25%. What is the corporate spread? 2) A 4-year corporate bond has a coupon of 3.20\%, paid semi-annually, and is trading at a price of 97.793. What is the corporate spread? 3) A 10-year corporate bond has a coupon of 3.8%, paid semi-annually, and is trading with a spread of 80 bps. What is the price of the bond? Use the following Treasury curve and forecast data: 1yr:3.0% 2 yr: 3.2% 3 yr: 3.5% 4 yr: 3.6% 5 yr: 3.8% 7 yr: 3.9% 10 yr: 4.0% 7 yr TIPS: 0.8% Investor survey for average of short-term rates over the next 3 years: 3.1% Investor survey for average of short-term rates over the next 7 years: 3.4% Investor survey for average of short-term rates over the next 10 years: 3.4% 1) A 5-year corporate bond has a coupon of 3.0%, paid semi-annually, and trades at a yield 4.25%. What is the corporate spread? 2) A 4-year corporate bond has a coupon of 3.20\%, paid semi-annually, and is trading at a price of 97.793. What is the corporate spread? 3) A 10-year corporate bond has a coupon of 3.8%, paid semi-annually, and is trading with a spread of 80 bps. What is the price of the bond
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