Question

In: Finance

Find the corporate yield spread if the 8-year Treasury rate is 3% and the 8-year corporate...

Find the corporate yield spread if the 8-year Treasury rate is 3% and the 8-year corporate bond rate is 8%.

Solutions

Expert Solution

Non treasury bonds will be generally evaluated based on the difference between yeild on he treasury bond and the said bond yeild having an equivalent maturity.

In this case as the tenure is same Spread = 8- 3 = 5% which usally is the risk premium


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