Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. please answer c-d there are two corporate bonds, a

please answer c-d There are two corporate bonds, A and B. They both have face...

70.2K

Verified Solution

Question

Finance

please answer c-d

There are two corporate bonds, A and B. They both have face value of $100, zero-coupons and one year maturity.

A. Price: $87.5, Default probability: 4.7%, recovery rate: 59%.

B. Price: $91, Default probability: 6.6%, recovery rate: 47%.

a) What is the promised yield of Bond A?

b) What is the promised yield of Bond B?

(c) What is the expected return (i.e., expected YTM) of Bond A?

(d) What is the expected return (i.e., expected YTM) of Bond B?

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Physics
1.2K views

A raft is constructed of wood having a density of 6.00x102 kg/m3. Its surface area is...

Biology
1.2K views

Mistakes during DNA replication can cause mutations in the DNA can lead to which of...

Geometry
1.2K views

Select the simplification that accurately explains the following statement oot 4 2 2 1 4

Basic Math
1.2K views

- The coordinates of quadrilateral JKLM plotted on a coordinate plane are J(-2,3), K(3, 7),...

Calculus
1.2K views

3 X 2 1 3 2 1 For the above rational function f x 1...

Algebra
1.2K views

The expression 52 53 is equivalent to Answer 53 250 O 500 O 25

Algebra
1.2K views

Use the theoretical method to determine the probability of the following outcome and event State...

Accounting
1.2K views

CRJ 462 Course Hero How long have gangs been in...

Accounting
1.2K views

Requirement 2: The company has just hired a new...

Accounting
1.2K views

RS Corporation, a manufacturer of ethnic foods, contracted in 2020 to purchase 600 pounds of...

Accounting
1.2K views

Current Attempt in Progress You and several classmates are studying for the next accounting exam....

Accounting
1.2K views

2.79 Find the present worth of cash flows of $1000 that start now (time 0...