Use the table for the question(s)below.
Consider the following yields to maturity on various one-year zero-coupon securities:
-The credit spread of the B corporate bond is closest to:
A)1.6%.
B)0.8%.
C)1.0%.
D)1.4%.

Question

Use the table for the question(s)below.
Consider the following yields to maturity on various one-year zero-coupon securities: 
-The credit spread of the B corporate bond is closest to:
A)1.6%. 
B)0.8%. 
C)1.0%. 
D)1.4%.

Quizplus · Accepted Answer

The credit spread is the difference between the yield of a corporate bond and the yield of a risk-free government bond of similar maturity. The correct choice is based on the given options and typical credit spreads for B-rated corporate bonds.

Use the Table for the Question(s)below