Corporate Bond Yield

Rate Spread $=$ DRP $+$ LP

U$.$S$.$ Treasury $0\mathrm{.}83\%$

AAA corporate $0\mathrm{.}930\mathrm{.}10\%$

AA corporate $1\mathrm{.}310\mathrm{.}48$

A corporate $1\mathrm{.}690\mathrm{.}86$

What yield would you predict for each of these two investments? Round your answers to three decimal places.

$12-$year Treasury yield: $\%$

$7-$year Corporate yield: $\%$

Based on the information about the corporate bond provided in part b$,$ calculate yields and then construct a new yield curve graph that shows both the Treasury and the corporate bonds. Round your answers to two decimal places.

Years Treasury yield AA$-$corporate yield

$15\mathrm{.}37\%$

$25\mathrm{.}47\%$

$35\mathrm{.}62\%$

$45\mathrm{.}68\%$

$55\mathrm{.}61\%$

$105\mathrm{.}71\%$

$206\mathrm{.}34\%$

$305\mathrm{.}92\%$