Question: PLEASE SOLVE USING EXCEL! Question 4 Consider the corporate bond of the previous question. Suppose that a US Treasury bond with the same coupon rate
PLEASE SOLVE USING EXCEL! Question
Consider the corporate bond of the previous question. Suppose that a US Treasury bond with the
same coupon rate and maturity trades at par.
a What is the fair credit spread of the corporate bond?
b What would be the credit spread if there was no compensation for default risk ie if the fair
interest rate to discount the corporate bond was equal to the fair interest rate to discount the
Treasury bond?
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