Question: Corporate Bond Yield Rate Spread = DRP + LP U.S. Treasury 0.83 % AAA corporate 0.93 0.10 % AA corporate 1.31 0.48 A corporate 1.69

Corporate Bond Yield
Rate Spread = DRP + LP
U.S. Treasury 0.83 %
AAA corporate 0.93 0.10 %
AA corporate 1.31 0.48
A corporate 1.69 0.86

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
1 5.37 %
2 5.47 %
3 5.62 %
4 5.68 %
5 5.61 %
10 5.71 %
20 6.34 %
30 5.92 %

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