Affect expectations of corporate default

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Reference no: EM131942885

How did the Great Depression (1929-1933) and the Great Recession of 2007-2009

Affect expectations of corporate default? To investigate, construct for each of those periods a separate plot of the corporate bond yield spread. For the Depression period, plot from 1930 to 1933 the difference between the Baa corporate bond yield (FRED code: BAA) and the long-term government bond yield (FRED code: LTGOVTBD).

For the Great Recession, plot from 2007 to 2009 the difference between the Baa yield (FRED code: BAA) and the 10-year Treasury bond yield (FRED code: GS10). Compare the plots.

Reference no: EM131942885

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