Jan 2024 Update: What does it mean when a company's corporate spread tightens? The company's borrowing cost increases. The benchmark yield is outperforming

Question

What does it mean when a company's corporate spread tightens? The company's borrowing cost increases. The benchmark yield is outperforming the company's bonds. The company's borrowing capacity will become more restricive. The company's bonds are outperforming the benchmark yield. KNOWLEDGE CHECK What are the three main transmission mechanisms by which the yield curve affects the economy? Global impact, consumer impact, trade impact Housing rental impact, corporate impact, consumer impact Trade impact, corporate impact, housing rental impact Corporate impact, global impact. consumer impact

Asked By WhisperingWhimsy27 at 11 Jan 2024

Answered By Expert

Shaun

Expert · 2.6k answers · 2k people helped

Step 1/2

A credit spread is another name for a plan of action in which, upon a similar fundamental security, an elevated premium choice is issued and an inexpensive options is purchased. As a result, the trading account of the individual performing the two transactions receives credit.

Explanation:

The additional interest that a lender needs to receive as risk compensation is known as a corporate spread. The difference between the appropriate federal bond yield and the gap between them is expressed in the form of basis points The spread widens as risk perception rises.

Step 2/2

Increasing spreads result in a rising yield curve. This indicates that economic growth is anticipated in the years to come. However, a flattening of the yield curve typically denotes a decline in rates for brief periods.

Explanation:

Increased risk of default in the bond market is often indicated by higher spreads on credit. Additionally, buyers' need for larger risk prices in order to make up for rising risk associated with credit is an indication suggesting the marketplace is determining prices for greater default chances.

Final Answer

Therefore, the correct answer is option d, the company's bonds are outperforming the benchmark yield.

🧑‍🏫 More Questions

Description CS city hires M workers who drive water trucks. They spray water on the streets to clean them, and reduce the dust concentration. There are N streets in CS city. The city has a dust control plan, which uses a task scheduler to generate a daily cleaning plan. This plan tells each worker what streets they are responsible for, and ideally all streets will be cleaned. For example, the plan tells worker A to clean street 0 to street 3([0,3]), worker B to clean streets [4,6]. This plan will clean 7 streets. However, the task scheduler is buggy. Today it tells worker A to clean streets [0,3] and tells worker B to clean streets [3, 5]. Someone realizes that two workers cleaned street 3 twice, and no one cleaned street 6. It's your job to write a program to automatically detect the task scheduler's bugs, and report how many streets are not cleaned in today's plan. Input Format The first line contains two integers M,N. M is the number of workers, and N is the number of streets. The following M lines are just the plan generated by task scheduler. Each line contains two integers [Li, Ri ]. It indicates that worker i should clean street Li to Ri. Output Format One integer, representing how many streets have not been cleaned. Sample Input 27 Sample Input 27 03 35 Sample Output 1 Explanation Worker A cleans streets [0,3], and worker B cleans streets [3,5]. Street 6 is the only street that was not cleaned, so return 1. Input Constraints 50%,1<=M,N<=1000100%,1<=M,N<=200000

DIRECTIONS: Choose the BEST answer to each question and place your selection on the answer sheet 1. Which of the following transactions would require the use of the present value of an annuity due concept in order to calculate the present value of the asset obtained or liability owed at the date of incurrence? a. A capital lease is entered into with the initial lease payment due upon the signing of the lease agreement b. A capital lease is entered into with the initial lease payment due one month subse- quent to the signing of the lease agreement C. A ten-year 8% bond is issued onJanuary 2 with interest payable semiannually on July 1 and January 1 yielding 7%. d. A ten-year 8% bond is issued on January 2 with interest payable semiannually on July 1 and January 1 yielding 9%. 2. What best describes the time value of money? a. The interest rate charged on a loan b. Accounts receivable that are determined uncollectible c. An investment in a checking account. d. The relationship between time and money. 3. What is NOT a variable that is considered in interest computations? a. Principal. b. Interest rate. c. Assets. d. Time. Which factor would be greater-the present value of $1 for 10 periods at 8% per period or the future value of $1 for 10 periods at 8% per period? 4. Present value of $1 for 10 periods at 8% per period. a. b. c. d. Future value of $1 for 10 periods at 8% per period. The factors are the same. Need more information. Which table would you use to determine how much you would need to have deposited three years ago at 10% compounded annually in order to have $1,000 today? ra. Future value of 1 or present value of 1 b. Future value of an annuity due of 1 c. Future value of an ordinary annuity of 1 d. Present value of an ordinary annuity of 1 5. Which table would you use to determine how much must be deposited now in order to provide for 5 annual withdrawals at the beginning of each year, starting one year hence? a. Future value of an ordinary annuity of 1 b. Future value of an annuity due of 1 c. Present value of an annuity due of 1 d., Present value of an ordinary annuity of 1 6.

Match the following compounds to their likely solubility in water: C2H5OH, I2, KF with least, middle, most.   Could you explain it as well?

A company sells 10,000 shares of previously authorized stock at the par value of $10 per share. What's the correct entry to record the transaction? Debit cash $10, credit capital stock $10 Debit cash $100,000, credit capital stock $100,000 Debit cash $10,000, credit capital stock $10,000 Debit cash $100,000, credit treasury stock $100,000 Debit capital stock $100,000, credit cash $100,000

Question 6 /12 A company receives $10,000 in cash for services yet to be performed. Using the accrual method, what's the correct entry to record the transaction? (A) Debit cash $10,000, credit accounts receivable $10,000 (B) Debit cash $10,000, credit sales revenue$1 0,000 (C) Debit sales revenue $10,000, credit cash $10,000 (D) Debit cash $10,000, credit unearned revenue $10,000 (E) Debit cash $10,000, credit accounts payable $10,000   Question 7 /12 Per company policy, tools with a purchase price greater than $1,000 are capitalized. What's the correct entry to record a tool purchase of $500? (A) Debit tools expense $500, credit cash $500 (B) Debit fixed asset $500, credit tools expense $500 (C) Debit fixed asset $500, credit cash $500 (D) Debit fixed asset $1,000, cred it cash $1,000 (E) Debit tools expense $1,000, cred it cash $1,000   Question 9 /12 A company performs $10,000 of services and issues an invoice to the customer. Using the accrual method. what's the cored entry to record the transactions? (A) Debit unearned revenue $10,000, credit salles revenue $10,000 (B) Debit accounts payable $10,000, credit sales revenue $10,000 (C) Debit services expense $10,000, credit sales revenue $10,000 (D) Debit cash $10,000, credit sales revenue $10,000 (E) Debit accounts receivable $10,000, credit salles revenue $10,000

👉 Interested in exploring further?

Chrome Extension

1. Search answers from our 90+ million questions database.

2. Get instantly AI Solutions powered by most advanced models like GPT-4, Bard, Math GPT, etc.

3. Enjoy one-stop access to millions of textbook solutions.

4. Chat with 50+ AI study mates to get personalized course studies.

5. Ask your questions simply with texts or screenshots everywhere.

Get It

Compare

Legal