The following table summarizes yields to maturity on several 1-year, zero-coupon securities: Security Yield Treasury % AAA Corporate % BBB Corporate % B Corporate %

Security	Yield
Treasury	2.960%
AAA Corporate	3.342%
BBB Corporate	3.661%
B Corporate	4.444%

a. What is the price (expressed as a percentage of the face value) of a 1-year, zero-coupon corporate bond with a AAA-rating and a face value of ?

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? Note: Assume annual compounding.