Jim is considering purchasing a 1-year bond issued by Best Buy that pays a coupon of 6% at the end of the year. BB has had a difficult time the past few years and is feeling some financial distress. Jim estimates the probability of default to be 7%, and if the company defaults, he expected to suffer a loss of 60%. The going rate for one-year T-Bills currently yields 2%.

1) What is the expected value of the bond?

2) What is the yield to maturity on the bond?

3) What is the credit spread on the bond?