A 6% annual coupon corporate bond with two years remaining to maturity is trading at a...

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A 6% annual coupon corporate bond with two years remaining to maturity is trading at a...

A 6% annual coupon corporate bond with two years remaining to maturity is trading at a price of 100.125. The two year, 4% annual payment government benchmark bond is trading at a price of 100.75. The G-spread for the corporate bond is closest to:

a) 2.33%

b) 2.00%

c) 2.11%

d) 2.28%

business finance

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Answer 1

Answer #1

Compute YTM of the two securities using Rate Function in excel. CORPORATE B GOVT. BOND BOND Inputs ( nper 2 years pmt $6 [$1

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Answer 2

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