Suppose that in an asset swap is the market price of the bond per dollar of principal, * is the default-free value of the bond per dollar of principal, and V is the present value of the asset swap spread per dollar of principal Show that V-B -B* 20.15.

Show that under Merion's model in Section 2016 the credit spread on a T-year zero- coupon bond is In(N)+ N(-4)/11/7, where DeVo