Difference between two investment alternatives to investor

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Question

As an investor in the $99M security issued by the SPE, compared with an alternative investment: the standard bond with face value $99M paying 5.5% coupon (interest payment) issued by the same bank (the issuer in the example), what the key difference in risk (interest rate risk, credit risk) facing the investor? Discuss the difference between the two investment alternatives to the investor.

Reference no: EM133674505

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