Use the information for the question(s)below.
-The above table shows the yields to maturity on a number of one-year,zero-coupon securities.What is the credit spread on a one-year,zero-coupon corporate bond with a B rating?

Question

Use the information for the question(s)below. 
-The above table shows the yields to maturity on a number of one-year,zero-coupon securities.What is the credit spread on a one-year,zero-coupon corporate bond with a B rating?

Quizplus · Accepted Answer

The credit spread is the difference between the yield on a corporate bond and the yield on a risk-free bond of the same maturity. Assuming the risk-free rate is lower than the yield on the B-rated bond, the spread is 1.7%.

Use the Information for the Question(s)below