Answers

A
1 Liquidity risk factor
2 Company defaulting Risk- may become default in future
3 company fundamental might change due to change in the country future prespective
B
AA-BBB-B-DEFAULT
AA-BBB-BB
AA-A-BB
TOTAL PROBABILITY OF
DEFAULT
THE COMPANY CANNOT GO

0.00350%
0.00200%
0.00090%
0.00640%

DEFAULT IN FIRST 3 YEARS

BECAUSE THE MAXIMUM
PROBABILITY OF BEING
DEFAULT IS VERY VERY
CONCLUSILESS
C

2 YR GOVT BOND YIELD

BBB RATED BPS
TOTAL BOND YIELD
COUPN PAYMENT
BOND PRICE WILL BE
ROI

ROI

3%
90
3.90%
2.30%
96.97791891
-0.7200%
0.0045906

e prespective