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6/1/2025 1:12


Vikram Vedanti is comparing two identical maturity Non-callable bonds. The first one is a Corporate bond issued by Chaturvedi Industries, a AAA rated 5 year bond and the second bond is a On-the-run Treasury Security with same maturity.
Yield on the first bond is 3.22% whereas the current OTR yields for 5 year treasury is at 2.24%.
Given these details, which of the following calculations is correct?

a : Absolute Yield Spread between these two bonds is 108 basis points.
b : Yield Ratio (measured as Bond B / Bond A) is 1.187
c : Relative Yield Spread between these two bonds is 43.75%
d : Cannot be determined with given information

* * 204

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