When all cash flows are assumed to be discounted by a single yield, why is there no difference between the duration (sensitivity to yield), interest-rate duration (sensitivity to rates), and spread duration (sensitivity to spreads)?
Answer to relevant QuestionsAssume the following for corporate bond A: spread duration = 5, credit spread = 100 basis points, and weight in the portfolio = 6%. Answer the below questions. (a) What is bond A’s duration times spread? (b) What is bond ...Answer the below questions. (a) What is the difference between a positive and negative covenant? (b) What is the purpose of the analysis of covenants in assessing the credit risk of an issuer? In the analysis of net assets, what factors should be considered? In analyzing the labor situation in an industry in which a corporate issue operates, what should the credit analyst examine? What would be a suitable metric to assess credit risk on a relative basis when making a relative value decision?
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