A BBB-rated corporate bond has a yield to maturity of 8.2%. A U.S. Treasury security has a yield to maturity of 6.5%. These yields 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.

A. What is the price (expressed as a percentage of the face value0 of 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 8.2%

Treasury YTM 6.5%

Common rate 7%

Maturity (years) 5

Face value 1,000

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

Coupon

Number of periods_____

Semiannual YTM____

Bond price_____

Percentage of face value ____

B What is the price (expressed as a percentage of the face value) of the BBB value?

Semiannual YTM_____

Bond Price______

Percentage of the face value____

C What is the credit spread on the BBB bonds?

Bonds____