The following table summarizes the yields to maturity on several? one-year, zero-coupon? securities:

Security Yield ?(%)

Treasury 3.13

AAA corporate 3.27

BBB corporate 4.27

B corporate 4.94

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

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?