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What is the credit spread on? aaa-rated corporate? bonds

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Reference no: EM132911186

The following table summarizes yields to maturity on several? 1-year, zero-coupon? securities:

 Security                    Yield

Treasury                3.100?%

AAA Corporate         3.200?%

BBB Corporate         4.200?%

B Corporate               4.900?%

Problem a. What is the price? (expressed as a percentage of the face? value) of a? 1-year, zero-coupon corporate bond with a? AAA-rating and a face value of $1,000??

Problem b. What is the credit spread on? AAA-rated corporate? bonds?

Problem c. What is the credit spread on? B-rated corporate? bonds?

Problem d. How does the credit spread change with the bond? rating? Why?

Reference no: EM132911186

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