Determine the price expressed as a percentage of the face

Determine the price expressed as a percentage of the face

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Reference no: EM13476032

The following table summarizes the yields to maturity on several one-year, zero-coupon securities:

Security	Yield (%)
Treasury	3.1
AAA corporate	3.2
BBB corporate	4.2
B corporate	4.9

a.What is the price (expressed as a percentage of the face value) of a one-year, zero-coupon corporate bond with a AAA rating?
b.What is the credit spread on AAA-rated corporate bonds?
c.What is the credit spread on B-rated corporate bonds?
d.How does the credit spread change with the bond rating? Why?

Reference no: EM13476032

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