Percentage of the face value of the treasury bond

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A BBB-rated corporate bond has a yield to maturity of 11.7%. A U.S. treasury security has a yield to maturity of 9.9%. These yields are quoted as APRs with semiannual compounding. Both bonds pay semi-annual coupons at a rate of 10.2% and have five years to maturity.

a. What is the price (expressed as a percentage of the face value) of the treasury bond?

b. What is the price (expressed as a percentage of the face value) of the? BBB-rated corporate bond?

c. What is the credit spread on the BBB bonds?

Reference no: EM131886467

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