Use the following information to answer the questions below

Use the following information to answer the question(s) below erm years) 20 20 20 20 Yield 1%) 55% 7.0% 8.0% 9.6% Security Treasury AAA Corporate BBB Corporate B Corporate e credit spread on BBB- rated corporate bonds is O 10% 25% 0 1.5% 4.1% Click Save and Submit to save and submit. Click Save All Answers to save a

Solution

B.2.5%.

credit spread on BBB rated corporate bond = yield on BBB corporate bond - treasury yield

=>8.0% - 5.5%

=>2.5%.