The Above Table Shows the Yields to Maturity on a Number

question 88

Multiple Choice

The above table shows the yields to maturity on a number of two-year, zero-coupon securities. What is the credit spread on a two-year, zero-coupon corporate bond with a B rating?

• A)2.4%
• B)2.0%
• C)2.8%
• D)1.6%

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Definitions:

Salesperson

An individual who sells goods or services to customers for a living.

Open-End Credit Line

A flexible loan facility that allows borrowers to draw down, repay, and redraw loans up to a specified credit limit.

Finance Charge

The total cost of borrowing, including interest and any other charges assessed by the creditor on a loan or credit.

Unpaid Balances

Amounts owed that have not yet been paid, typically referring to outstanding debts or bills.