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    Fundamentals of Corporate Finance Study Set 12
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    Exam 6: Bonds
  5. Question
    Why Is the Yield of Bonds with Credit Risk Higher
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Why Is the Yield of Bonds with Credit Risk Higher

Question 19

Question 19

Essay

Why is the yield of bonds with credit risk higher than that of otherwise identical default-free bonds?

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Because the yield to maturity is calcula...

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