Use the Table for the Question(s)below

question 14

Multiple Choice

Use the table for the question(s) below.
Consider the following yields to maturity on various one-year zero-coupon securities:
- The credit spread of the BBB corporate bond is closest to:

• A)1.0%
• B)5.6%
• C)1.6%
• D)0.8%
• E)1.8%

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Definitions:

Threat of Entry

The risk existing businesses face when new competitors are able to enter the market or industry.

Existing Competitors

Companies that are currently operating in the same market and competing for the same customers.

Industry

A classification that refers to groups of companies that are related based on their primary business activities.

Bargaining Power

The relative ability of parties in a negotiation to exert influence over each other, often determining the terms and conditions of agreements.