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

a. What is the credit spread on AAA-rated corporate bonds?

b. What is the credit spread on B-rated corporate bonds?

c. How does the credit spread change with the bond rating? Why?

The following table summarizes the yields to maturity on several one-year, zero-coupon securities: Security Treasury Yield (%) 0.9 2.2 3.2 AAA corporate BBB corporate B corporate 3.8