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Given the following information relating to the yields to maturity on several one- year, zero-coupon bonds: Bond Yield (%) US Treasury 3.0 AAA Corporate 3.3

Given the following information relating to the yields to maturity on several one- year, zero-coupon bonds: Bond Yield (%) US Treasury 3.0 AAA Corporate 3.3 A Corporate 3.9 BB Corporate 4.8 a. Find the price of a one-year, zero-coupon corporate bond with a AAA rating. b. Find the credit spread on the AAA-rated corporate bonds. c. Find the credit spread on the A-rated corporate bonds. d. Find the credit spread on the BB-rated corporate bonds. e. In what way does the credit spread change with the bond rating?

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