Price and the credit spread of a corporate bond

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Problem:

What difference would you expect a downgrade from investment to speculative grade to have on (a) the price; and (b) the credit spread of a corporate bond. Would you expect the price and spread changes to typically occur before or after the downgrading?

Additional Information:

This question basically belongs to Finance as well as it explains about the differences which can be expected from downgrade from investments to speculative grade to have on the price and the credit spread of a corporate bond.

Reference no: EM13826505

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