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The following table summarizes the yields to maturity on several one-year, zero-coupon securities: Security Yield (%) Treasury 3.08 AAA corporate 3.17 BBB corporate 4.17 B

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The following table summarizes the yields to maturity on several one-year, zero-coupon securities: Security Yield (%) Treasury 3.08 AAA corporate 3.17 BBB corporate 4.17 B corporate 4.92 a. What is the price (expressed as a percentage of the face value of a one-year, zero-coupon corporate bond with a MA 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 is the credit spread change with the bond rating? Why? 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? The price of this bond will be % (Round to three decimal places) b. What is the credit spread on AAA-rated corporate bonds? The credit spread on AAA-rated corporate bonds is % (Round to two decimal places.) c. What is the credit spread on Brated corporate bonds? The credt spread on B-rated corporate bonds is % (Round to two otimal places) d. How does the credit spread change with the bond roting? Why? (Select the best choice below) OA. The credit spread decreases as the bond rating fulls because lower rated bonds are miskie OB. The credit spread decreases as the bond rating rises because higher rated bonds are riskier OC. The credit spread increases as the bond rating falls because lower-rated bonds me riskie OD. The credit spread increases as the bond rating rises because higher rated bonds are riskier

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