Question

In: Accounting

About what does a BBB 5-year corporate bond pay?

About what does a BBB 5-year corporate bond pay?

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Expert Solution

A BBB 5-year corporate bond pays yield of about 2%-3%.

A diversified set of well-chosen five-year BBB corporates gives yield of 2%-3%. It is possible to get 4%-5% yields from investment-grade corporate bonds with maturities of about 10 years.


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