Using treasury instruments as a benchmark, calculate the credit spread for BBB rated corporate bonds based on the following information on yields for various bonds:

BBB rated 10 year corporate bond= 8%

AAA rated 10 year corporate bond= 5.5%

10 year Treasury bond= 3%

1 month Treasury bill= 1%

• A.

  3%

• B.

  5%

• C.

  7%

• D.

  2.5%