A? BBB-rated corporate bond has a yield to maturity of 12.8 %. A U.S. treasury security has a yield to maturity of 11.4 %. These yields are quoted as APRs with semiannual compounding. Both bonds pay? semi-annual coupons at a rate of 11.5% and have five years to maturity.
a. What is the price? (expressed as a percentage of the face? value) of the treasury? bond?
b. What is the price? (expressed as a percentage of the face? value) of the? BBB-rated corporate? bond?
c. What is the credit spread on the BBB? bonds?