the swap rate and the yield to maturity.

问题如下：

Scott reminds Bird to include an update on credit instruments. He provides details on a newly issued zero-coupon bond by Coores Corporation, rated A1/A+, with five years to maturity priced to yield 7.30% to maturity. This credit typically trades in line with high-quality financial institutions and corporate issuers. Current market rates are 7% for the five-year risk-free spot rate, and the five-year swap spread is 0.30%.

Using the information provided, is the Coores Corporation bond most likely mispriced?

选项：

A.

Yes, because of the difference between the swap rate and the yield to maturity.

B.

No

C.

Yes, because of the difference between the swap rate and the spot rate

解释：

Correct Answer: B

The Coores bond is likely not mispriced because its 7.30% yield to maturity is equivalent to the swap rate for the equivalent maturity (7.00% spot rate plus 0.30% swap spread). Also, Coores default risk rating of A1/A+ matches the default risk rating of most commercial banks, which generally carry a default risk rating of A1/A+.