Whether the yield spread on corporate bond over a Treasury bond tend to be wider or narrower and change in spread be affected by the credit strength of the firm. Introduction: Yield Spread: It is the difference in the rate of return of two different investments with same maturity period but different credit conditions.

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Chapter 7, Problem 14Q

Summary Introduction

To identify: Whether the yield spread on corporate bond over a Treasury bond tend to be wider or narrower and change in spread be affected by the credit strength of the firm.

Introduction:

Yield Spread: It is the difference in the rate of return of two different investments with same maturity period but different credit conditions.

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