A BBB$-$rated corporate bond has a yield to maturity of $8\mathrm{.}2\%.$ A U$.$S$.$ Treasury security has a yield to maturity of $6\mathrm{.}5\%.$ These yields are quoted as APRs with semiannual compounding. Both bonds pay semiannual coupons at a rate of $7\%$ and have five years to maturity. Note: assume a $$1,000$ face value.

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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?

BBB bond YTM

Treasury YTM

Coupon rate

Maturity $($years$)$

Face value

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