Note 3-10-08 (ch5 continue)

Note 3-10-08 (ch5 continue) - Lower grade bonds have higher...

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Bus 170 Note Ch5 Bonds Continued Default Risk (Table 5-1, pg133) Investment Grade – Lower the expected yield AAA Aaa AA Aa A A BBB Bbb Junk Bonds BB Ba B B Moody’s Default Risk Premium – The additional yield on a bond investors require for bearing credit risk.
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Unformatted text preview: Lower grade bonds have higher coupon pmt rate. Zero coupon bonds – issued at a steep discount – still matures to pay face of $1000.00 – Rate of return – total return is only capital appreciation Ch6...
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This note was uploaded on 09/08/2010 for the course BUS 170 at San Jose State.

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