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The following table summarizes the yields to maturity on several one-year, zero-coupon securities: Security Treasury AAA corporate BBB corporate B corporate Yield (%) 3.15 3.27

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The following table summarizes the yields to maturity on several one-year, zero-coupon securities: Security Treasury AAA corporate BBB corporate B corporate Yield (%) 3.15 3.27 4.28 4.96 a. What is the credit spread on AAA-rated corporate bonds? b. What is the credit spread on B-rated corporate bonds? c. How does the credit spread change with the bond rating? Why? a. What is the credit spread on AAA-rated corporate bonds? The credit spread on AAA-rated corporate bonds is %. (Round to two decimal places.) b. What is the credit spread on B-rated corporate bonds? The credit spread on B-rated corporate bonds is %. (Round to two decimal places.)

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