The short-term or the long-term maturity

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Reference no: EM131978927

Next, compare the CCC spread for a short-term maturity (such as two years) versus a long-term maturity (such as 10 years). Go to giddy.org/db/corpspreads.htm. the spreads are listed in the form of basis points (100 basispoints = 1%) above the Treasury security with the same maturity.

a. Is the spread larger for the short-term or the long-term maturity?

b. Offer an explanation for this.

c. Notice that the difference in spreads for a given rating level among maturities varies with rating level that you assess. Oer an explanation for this.

Reference no: EM131978927

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