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What is the price of the bb-related corporate bond

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Reference no: EM132920315

Question - A BB-related corporate bond has a yield to maturity of 12%. A US treasury bond has a yield to maturity of 4%. Both bonds pay quarterly coupons at an annual rate of 8% (ie coupon rate) and have five years to maturity. The face value of both bonds is $100.

A) What is the price of the treasury bond?

B) What is the price of the BB-related corporate bond?

C) What is the credit spread on the BB-bonds?

Reference no: EM132920315

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