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A BBB - rated corporate bond has a yield to maturity of 1 1 . 6 % . A U . S . Treasury security
A BBBrated corporate bond has a yield to maturity of A US Treasury security has a yield to maturity of These yields re quoted as APRs with semiannual compounding. Both bonds pay semiannual coupons at a rate of and have 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 BBBrated corporate bond?
c What is the credit spread on the BBB bonds?
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