Dominican Republic bond: Credit rating from SP = BB- ; Credit rating from Fitch = B+ US treasury bond: Credit rating from Moodys = Aaa ; Credit…

Dominican Republic bond: Credit rating from S&P = BB- ; Credit rating from Fitch = B+

US treasury bond: Credit rating from Moodys = Aaa ; Credit rating from Fitch = AAA

Question: If both of these bonds are sovereign bonds, then does the Yield to Maturity (YTM) represent the risk free rate in each of these countries? (i.e. the US and the Dominican Republic).  Why or why not? Base your answer on the credit rating of each bond (3marks)

Dominican Republic bond: Credit rating from S&P = BB- ; Credit rating from Fitch = B+US treasury bond: Credit rating from Moodys = Aaa ; Credit rating from Fitch = AAAQuestion: If both of…

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