Question

A BBB-rated corporate bond has a yield to maturity of 11.4 %. A U.S. treasury security has a yield to maturity of 10.0 %. These yields are quoted as APRs with semiannual compounding. Both bonds pay semi-annual coupons at a rate of 10.5 % and have five years to maturity. (I need help with all 3 parts thank you.)

a. What is the price (expressed as a percentage of the facevalue) of the treasury bond?

b. What is the price (expressed as a percentage of the facevalue) of the BBB-rated corporate bond?

c. What is the credit spread on the BBB bonds?

Answer #1

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A BBB-rated corporate bond has a yield to maturity of 10.5%. A
U.S. treasury security has a yield to maturity of 9.2%. These
yields are quoted as APRs with semiannual compounding. Both bonds
pay semi-annual coupons at a rate of 9.4% and have five years to
maturity.
A) What is the price (expressed as a percentage of the face
value) of the treasury bond?
B) What is the price (expressed as a percentage of the face
value) of the BBB-rated...

A BBB-rated corporate bond has a yield to maturity of 12.2 %. A
U.S. treasury security has a yield to maturity of 10.5 %. These
yields are quoted as APRs with semiannual compounding. Both bonds
pay semi-annual coupons at a rate of 11.0 % and have five years to
maturity. a. What is the price (expressed as a percentage of
the face value) of the treasury bond? b. What is the price
(expressed as a percentage of the face value)...

A BBB-rated corporate bond has a yield to maturity of 10.6 %. A
U.S. treasury security has a yield to maturity of 9.3 %. These
yields are quoted as APRs with semiannual compounding. Both bonds
pay semi-annual coupons at a rate of 9.8 % and have five years to
maturity.
a. What is the price (expressed as a percentage of the face
value) of the treasury bond?
b. What is the price (expressed as a percentage of the face
value)...

A BBB-rated corporate bond has a yield to maturity of 6.6 %. A
U.S. treasury security has a yield to maturity of 5.1 %. These
yields are quoted as APRs with semiannual compounding. Both bonds
pay semi-annual coupons at a rate of 6.1 % and have five years to
maturity.
a. What is the price (expressed as a percentage of the face
value) of the treasury bond?
b. What is the price (expressed as a percentage of the face
value)...

A BBB-rated corporate bond has a yield to maturity of 9.4%.A
U.S. treasury security has a yield to maturity of
7.5%. These yields are quoted as
APRs with semiannual compounding. Both bonds pay semi-annual
coupons at a rate of 8.2% and have five years to maturity.
a. What is the price (expressed as a percentage of the face
value) of the treasury bond?
b. What is the price (expressed as a percentage of the face
value) of the BBB-rated corporate...

A BBB-rated corporate bond has a yield to maturity of 11.6 %. A
U.S. Treasury security has a yield to maturity of 9.8 %. These
yields are quoted as APRs with semiannual compounding. Both bonds
pay semiannual coupons at an annual rate of 9.9 % and have five
years to maturity.
a. What is the price (expressed as a percentage of the face
value) of the Treasury bond?
b. What is the price (expressed as a percentage of the face...

BBB -rated corporate bond has a yield to, maturity of 8.5%.US
treasury security has a yield to maturity of 7.0%. These yields are
quoted as APR with semiannual compounding, Both pay semiannual
coupons of 7.3% and hhave five years to maturity.
a. What is the price (expressed as a percentage of the face
value) of the treasury bond?
b. What is the price (expressed as a percentage of the face
value) of the BBB rated corporate bond?
c.What is the...

A
BBB-rated corporate bond has a yield to maturity of 6.1% a US
treasury security has yield to maturity of 4.8%.these yield are
quoted as APRs with semiannual compounding.both bonds pay
semi-annual coupons at a rate of 7.5% and have five years to
maturity
a.what is the price (expressed as a percentage of the face
value) of the treasury bond ?
b.what is the price (expressed as a percenatge of the face
value ) of the BBB-rated corporate bond?
c.what...

The following table summarizes yields to maturity on several
1-year, zero-coupon securities:
Security
Yield
Treasury
2.900%
AAA Corporate1
2.991%
BBB Corporate
3.614%
B Corporate
4.379%
a. What is the price
(expressed as a percentage of the face value) of a 1-year,
zero-coupon corporate bond with a AAA-rating and a face value of
$1,000?
b. What is the credit
spread on AAA-rated corporate bonds?
c. What is the credit
spread on B-rated corporate bonds?
d. How does the
credit spread change...

The following table summarizes the yields to maturity on
several one-year, zero-coupon securities: Security Yield (%)
Treasury 3.06 AAA corporate 3.18 BBB corporate 4.21 B corporate
4.82 a. What is the price (expressed as a percentage of the face
value) of a one-year, zero-coupon corporate bond with a AAA
rating? b. What is the credit spread on AAA-rated corporate
bonds? c. What is the credit spread on B-rated corporate bonds?
d. How does the credit spread change with the bond...

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