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ce The following table summarizes the yields to maturity on several one-year, zero-coupon securities. Security Yield (%) Government of Canada 3.14 AAA corporate 3.20 BBB

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ce The following table summarizes the yields to maturity on several one-year, zero-coupon securities. Security Yield (%) Government of Canada 3.14 AAA corporate 3.20 BBB corporate 4.29 B corporate 4.95 a. What is the price (expressed as a percentage of the face value) of a one-year, zero-coupon corporate bond with an AAA rating? b. What is the credit spread on AAA-rated corporate bonds? c. What is the credit spread on B-rated corporate bonds? d. How does the credit spread change with the bond rating? Why? a. What is the price (expressed as a percentage of the face value) of a one-year, zero-coupon corporate bond with an AAA rating? The price of this bond is %. (Round to three decimal places.)

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