At any given time how would the yeild curve facing a AAA-rated company compare with the yield curve for u.s. treasury securities? At any given time how would the yield curve facing a BB-rated company compare with the yield curve u.s. treasury securities. Dr a graph to illustrate your answer.

Answer 1

I presume you mean the yield of purchasing a bond from a AAA company.

US securities are the least risky and therefore have the lowest yield. AAA are slightly more risky, and so (ignoring risk) have a slightly higher yield. BB companies are substantially more risky and ergo have a substantially higher yield.