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Security: Treasury AAA Corporate BBB Corporate B Corporate Yield (%): 5.2 5.4 6.8 8.3 The above table shows the yields to maturity on a number

Security:

Treasury

AAA Corporate

BBB Corporate

B Corporate

Yield (%):

5.2

5.4

6.8

8.3

The above table shows the yields to maturity on a number of

four

-year,

zero-coupon securities. What is the credit spread on a

four

-year,

zero-coupon corporate bond with a B rating?

A.

2.5

%

B.

3.7

%

C.

3.1

%

D.

4.3

%

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