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You own a BBB rated 10-year corporate bond. US Treasury Interest Rates rose 1% but credit spreads on 10-year BBB corporate bonds declined by 25
You own a BBB rated 10-year corporate bond. US Treasury Interest Rates rose 1% but credit spreads on 10-year BBB corporate bonds declined by 25 basis points (0.25%).
A. What happened to your bond's price? (Did it go up, down or stayed unchanged?)
B. Explain the process you used.
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