A BBB-rated corporate bond has a yield to maturity of 8.8%. A U.S. Treasury security has a yield to maturity of 6.8% . These yields are quoted as APRs with semiannual compounding. Both bonds pay semi-annual coupons at a rate of 6.9% and have five 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 BBB-rated corporate bond?

c. What is the credit spread on the BBB bonds?