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The following table summarizes the yields to maturity on several one-year, zero-coupon securities: a. What is the price (expressed as a percentage of the face

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The following table summarizes the yields to maturity on several one-year, zero-coupon securities: 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? a. What is the price (expressed as a percentage of the face value of a one-year, zero-coupon corporate bond with a AA 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 0% (Round to two decimal places.) c. What is the credit spread on B-rated corporate bonds? The credit spread on B-rated corporate bonds is %. (Round to two decimal places) d. How does the credit spread change with the bond rating? Why? (Select the best choice below) O A The credit spread decreases as the bond rating falls because lower-rated bonds are riskier, B. The credit spread increases as the bond rating falls because lower-rated bonds are riskier. 1:16:51 DOLCnc pressed read on read on spread Data table - X aressed ll be (Click on the following icon in order to copy its contents into a spreadsheet.) Important: The yields displayed are annually compounded yields. Security Yield (%) Treasury 3.14 AAA corporate 3.23 BBB corporate 4.20 B corporate 4.89 ad on -rated ad on 8 ed co ead Print Done ecres TIESA wererated bonds are risker

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