Question: What is the formula for calculating default risk premium or credit spread if I have these inputs: Bond price, annual coupon rate, The Time until

What is the formula for calculating default risk premium or credit spread if I have these inputs: Bond price, annual coupon rate, The Time until maturity, and the risk free rate? Thanks. I am pretty sure I know the formula just wanted a refresher before completing my finance homework.

PLEASE SHOW EXAMPLE AND FORMULA TO USE

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!