he following table summarizes yields to maturity on several 1-year, zero-coupon securities:(Click on the following icon in order to copy its contents into a spreadsheet.)

Security Yield

Treasury % 2.860%

AAA corporate % 3.287%

BBB corporate % 3.585%

B corporate % 4.224%

a. What is the price (expressed as a percentage of the face value) of a 1-year, zero-coupon corporate bond with a AAA-rating and a face value of ?

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?

Note: Assume annual compounding. Question content area bottom Part 1 a. What is the price (expressed as a percentage of the face value) of a 1-year, zero-coupon corporate bond with a AAA-rating and a face value of ? The price, expressed as a percentage of the face value, is enter your response here%. (Round to three decimal places.)