Show that the credit spread on this bond is exactly equal to P (1 + r ) /(1 P ) . (Hint: First express the price of the bond at t = 0 as a function of P and r using the backwards procedure. Next, express (1 + Y T M ) of the bond at t = 0 as a function of the bond price, which should also include P and r . Finally, apply the definition of the credit spread.)