Analyze Inflation And Interest Rates
Series 65 · Flashcards · Application
SERIES 65 · FLASHCARDS
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QUESTION
If a corporate bond yields
6
%
6\%
6%
and a Treasury yields
4
%
4\%
4%
, what is the credit spread?
QUESTION
If the nominal rate is
7
%
7\%
7%
and inflation is
3
%
3\%
3%
, what is the approximate real rate?
QUESTION
If a corporate bond yields
6
%
6\%
6%
and a Treasury yields
4
%
4\%
4%
, what is the credit spread?
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ANSWER
2
%
2\%
2%
. Credit spread is calculated as the difference in yields, reflecting the risk premium for the corporate bond.
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