Determine the difference between the aaa and ccc spread

Assignment Help Finance Basics

Reference no: EM131975970

Question: First determine the difference between the AAA and CCC spreads. This indicates how much more of a yield is required on CCC-rated bonds versus AAA- rated bonds. Next, determine the difference between AAA and BBB spreads. Then determine the difference between BBB and CCC spreads.

a. Is the difference larger between AAA and BBB or the BBB and CCC spreads?

b. What does this tell you about the perceived risk of the bonds in these rating categories?

Reference no: EM131975970

Questions Cloud

What should this amount be at an interest rate of 6 percent : If the corporation wants to set up a trust fund to pay for this ball field expense for years to come, what should this amount be at an interest rate of 6%?

What does the debt-equity ratio need to be for the firm : A firm wants to create a weighted average cost of capital of 7.2%. the firms cost of equity is 10% and its pre-tax cost of debt is 8%. the tax rate is 34%.

What exactly is meant by a risk register : What exactly is meant by a risk register? What items would you find in a risk register and how are the categories in the risk register determined?

What present sum of money should be set aside now to pay : What present sum of money should be set aside now to pay for the required maintenance expense over the ten year period.

Determine the difference between the aaa and ccc spread : First determine the difference between the AAA and CCC spreads. This indicates how much more of a yield is required on CCC-rated bonds versus AAA- rated bonds.

What are the differences in the roles of stockbroker : What are the differences in the roles of a stockbroker, an investment bank and a venture capital firm?

The process of mortgage securitization for commercial banks : What are the main advantages and risks of the process of mortgage securitization for commercial banks and the financial system?

What does the semiconductor manufacturer think the value : A major semiconductor manufacturer is impressed with a new packaging technology developed at the University of Maryland.

How emphasis reinforces your opening subjective statement : In the last paragraph discuss how emphasis reinforces your opening subjective statement. Identify a term from the emphasis portion of the principles lesson.

User Account

All Pages