Analyzing two bonds for purchase. The first bond is a 3-year Treasury bond with a 5% stated annual coupon rate (paid semiannually), a face value of $12,000, and a current price of $12,200 . The second bond is a risky 3-year zero coupon corporate bond with a face value of $7,000 and a current price of $5,

Q1. What is the YTM (stated as a Bond -Equivalent Yield) for the Treasury bond?

Q2. What is the YTM (stated as a Bond-Equivalent Yield ) for the corporate bord? . There is some chance the issuer default on the corporate bond at the maturity date. If the default happens, the bond investors will get nothing . If the expected return on the corporate bond is 6.5% (stated as an APR with semiannual compounding) what is the probability of default?

face value 12,000

current price 12,200