Assume That the Treasury Bond Yield Today Is 2 Percentage

question 28

Multiple Choice

Assume that the Treasury bond yield today is 2 percentage points higher than it was one year ago. Also assume that the credit (default) risk premium of an A-rated bond declined by 0.4 percentage point since one year ago. A newly issued A-rated bond will likely offer a yield today that is ____ the yield that was offered on an A-rated bond issued one year ago.

• A)greater than
• B)equal to
• C)less than
• D)A or B are both common

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