Professional Documents
Culture Documents
Chapter 6
Default risk
Liquidity
Tax considerations
6-2
Sources: Board of Governors of the Federal Reserve System, Banking and Monetary Statistics,
19411970; Federal Reserve Bank of St. Louis FRED database: http://research.stlouisfed.org/fred2
6-3
6-4
9/23/16
Price of Bonds, P
ST
Sc
i2
Risk
Premium
P c1
P2T
T
P1
P2
i 2c
c
D2
D2T
D1T
D1
Table 1 Bond
Ratings by
Moody s,
Standard and
Poor s, and
Fitch
6-6
Price of Bonds, P
ST
Sm
P m2
P 1T
P 1m
D m1
D m2
P 2T
D2T
D1T
6-7
6-8
9/23/16
6-9
6-10
6-12
9/23/16
6-13