A BBB - rated corporate bond has a yield to maturity of 1 1 . 0 %

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Question:

BBB

-

rated corporate bond has a yield to maturity of

11.0 % .

A U

.

.

Treasury security has a yield to maturity of

9.3 % .

These yields are quoted as APRs with semiannual compounding. Both bonds pay

semi

-

annual coupons at a rate of

9.9 %

and have

5

years to maturity.

.

What is the price

(

expressed as a percentage of the face

value

)

of the Treasury

bond?

.

What is the price

(

expressed as a percentage of the face

value

)

of the

BBB

-

rated corporate

bond?

.

What is the credit spread on the BBB

bonds?

Posted Date: May 18, 2024 07:09 PM

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A BBB - rated corporate bond has a yield to maturity of 1 1 . 0 %

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