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Over the past year, credit spread for an index of A-rated bonds increased from 75...

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Finance

Over the past year, credit spread for an index of A-rated bonds increased from 75 to 109 basis. The MRK 5.95 12/15/2028 G-spread increased from 45 basis points to 73 basis points with no change in its financial condition or A1 rating. The MRK issue could be considered....

A. Cheap because the A-rated bonds have a spread of 109 basis points over Treasuries

B. Rich because the current G spread is higher than it was 12 months ago

C. Cheap because the its spread changed less than the index changed

D. Rich because its spread versus the index is now higher than it was one year ago

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