1. Mexican sovereign US$-denominated zero coupon bonds with a 12-month maturity have a yield to maturity of 0.86% per year. The spread vs. similar bonds issued by the US government is 0.19%. Mexico has a sovereign rating of BBB+. The data imply that the US government pays:
A. .86% per year
B. .19% per year
C. .67% per year
D. -.67% per year
E. -.86% per year
F. -.19% per year
2. Mexican sovereign US$-denominated zero coupon bonds with a 12-month maturity have a yield to maturity of 0.86% per year. The spread vs. similar bonds issued by the US government is 0.19%. Mexico has a sovereign rating of BBB+. The bonds issued by the Mexican government should trade at a price of:
A. $98.65
B. $99.15
C. $98.95
D. $99.33
3. Mexican sovereign US$-denominated zero coupon bonds with a 12-month maturity have a yield to maturity of 0.86% per year. The spread vs. similar bonds issued by the US government is 0.19%. Mexico has a sovereign rating of BBB+. 4. Assuming a recovery rate of 50%, the probability that the Mexican government will default is:
A. 0%
B. 0.5%
C. 0.38%
D. -0.38%
E. -0.5%
F. 1.7%