Question: AC/DC Electrics bond is rated BB+ yields 5%. A comparable AA -rated corporate bond trades at 4% yield. Treasury bond of comparable maturity trades at

AC/DC Electrics bond is rated BB+ yields 5%. A comparable AA -rated corporate bond trades at 4% yield. Treasury bond of comparable maturity trades at 3.25%. What is the spread of the BB+ and AA bonds? Which bond has the higher default risk

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