The Yields to Maturity on a Number of One-Year,zero-Coupon Securities

question 47

Multiple Choice

The yields to maturity on a number of one-year,zero-coupon securities are shown in the table above.What is the credit spread on a one-year,zero-coupon corporate bond with an A rating?

• A) 4.7%
• B) 2%
• C) 1.2%
• D) 0.4%
• E) 0.8%

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Definitions:

Expectancy Theory

The assumption that motivation depends not only on how much a person wants something but also on how likely he or she is to get it.