The following table summarizes yields to maturity on several 1-year, zero-coupon securities:

Security	Yield
Treasury	3.020%
AAA Corporate	3.427%
BBB Corporate	3.654%
B Corporate	4.328%

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

$1,000?

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.

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

$1,000?

The price, expressed as a percentage of the face value, is

enter your response here%.

(Round to three decimal places.)