The 30-day T-bill rate is 5%.SWC Company has just issued $100 million of commercial paper at par.There is a 0.1% chance the company will default on the issue.If the firm defaults, the commercial paper will be worth $5 million.Determine the yield spread between the T-bill rate and commercial paper assuming that the required return by investors in commercial paper is equal to the T-bill rate.

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The Answer of The 30-day T-bill rate is 5%.SWC Company has just issued $100 million of commercial paper at par.There is a 0.1% chance the company will default on the issue.If the firm defaults, the commercial paper will be worth $5 million.Determine the yield spread between the T-bill rate and commercial paper assuming that the required return by investors in commercial paper is equal to the T-bill rate.

The 30-Day T-Bill Rate Is 5