Question

what can you conclude about P&G based on the graph?

-investment grade company

-non investment grade comapny

-not enough information

-none of these

QUESTION 9 Based on the attached chart, what can you conclude about P&G credit ratings based upon the bond spread? Gbond chart 1 Use the left mouse button to click and drag an area of the desktop. JS Treasury Actives Curve 97) Actions. 98) Table 99) Settings Tenor YEMİS Yield PCS MULTI Lower Chart mm/dd/yy Relative Last 1D1W 1M Modify Curves & Relative Valu • Plot Curves 7.00 <Add Curve) USD Procter & Gamble B US Treasury Actives Cur USD US Corporate AA+ , USD US Corporate A+, A, USD US Corporate BBB+, USD US Corporate BB+, E USD Honeywell Internati EUR Europe Consumer Di USD US Consumer Discre USD US Consumer Discre B1226 USD Procter & Gamble BYAL Yield Curve Last (Bid) Base Curve 125 DS US Treasury Active Curve Last 16:45:51 Show Constituents on Bas • BS73 USD US Corporate A .M.M-DVN. Yield Curve Last (Hid) • B574 USD US Corporate A, AA- BVAL Yield Curve Last (Hid) Recent Curves B575 USD US Corporate B88+, BOB, BBC-BYAL Veld Curve Last (Hid) • 85193 USD US Corporate 36.00, 06-DYN. Yield Curve Last (id) + CDX IG INDU CDSI GE + Bristol-Myers Squibb Tenor Curves related to US Tr 3) Show All Tenors > Curve Id 3M 2Y BY SYT 307 Bond Spread to Curve Punuan na IN

Answer 1

Answer = P&G is an Investment Grade Company

The bonds of P&G are trading at a yield between the US Corporate AA+, AA, AA- curve and US corporate BBB+, BBB, BBB- yield curve.
This implies that the bonds are stronger/safer than BBB+.
If the market perceived the P&G bonds to be weaker, the bid would have been at higher yields.

Thus, the bonds of P&G are of investment grade.