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.
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.
To compare the yield curve between a AAA-rated company and U.S. Treasury securities, you would need to analyze the yields of their respective bonds at different maturities. Similarly, to compare the yield curve between a BB-rated company and U.S. Treasury securities, you would need to analyze the yields of their bonds at different maturities as well.
Here are the steps to get the answer and generate a graph:
1. Gather the necessary data: Obtain yield data for AAA-rated corporate bonds, BB-rated corporate bonds, and U.S. Treasury securities. This data can be obtained from financial websites or databases like Bloomberg or the Federal Reserve Bank.
2. Select the appropriate maturities: Choose a range of maturities for the bonds, such as 1-year, 2-year, 5-year, 10-year, and 30-year.
3. Calculate the yields: Calculate the average yields for each maturity category for AAA-rated corporate bonds, BB-rated corporate bonds, and U.S. Treasury securities.
4. Plot the graph: Create a graph with the yield on the Y-axis and the maturity on the X-axis. Plot the average yield data for AAA-rated corporate bonds, BB-rated corporate bonds, and U.S. Treasury securities.
5. Interpret the graph: Analyze the graph to determine the differences in yield curves between the different categories. Look for patterns such as whether one curve is higher or lower than the others or whether the slopes of the curves differ.
Note: The exact comparison will depend on the specific time and market conditions.
Due to the limitations of the text-based format, I am unable to generate a visual graph. However, you can follow the steps outlined above to generate your own graph using Excel, Google Sheets, or any other suitable tool.