A BBB-rated corporate bond has a yield to maturity of 11.4 %. A U.S. treasury security has a yield to maturity of 10.0 %. These yields are quoted as APRs with semiannual compounding. Both bonds pay semi-annual coupons at a rate of 10.5 % and have five years to maturity. (I need help with all 3 parts thank you.)
a. What is the price (expressed as a percentage of the facevalue) of the treasury bond?
b. What is the price (expressed as a percentage of the facevalue) of the BBB-rated corporate bond?
c. What is the credit spread on the BBB bonds?
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