Bond Yield

(1)Based on the attached chart,which bond is premium bond?

a) Treasury Note Tn1

b)Treasury Note Tn2

c) Treasury Bond Tb

d) Municipal bond COb

e) Corporate bond APL

(2) Calculatecurrent yieldof Bond APL based on the closing quote on Feb 1, 2021.

(3) Calculatecredit spreadof Bond APL based on the closing quote on Feb 1, 2021.

(4)Assume that all three rating agencies decide tochangeBond APL's rating to "High Yield" category, how would such change in rating affect Bond APL'scredit spread?

a)Credit spread would widen

b)Credit spread would tighten and narrow

c)There should be no impact on credit spread

d)None of the answers are correct.

Bond Type Bond Maturity Coupon Bond Quote, closing Face Credit Symbol Rate Feb 1, 2021 Value Rating Corporate bond APL June 30, 2025 6% 95.38 1000 A Municipal bond Cob June 30, 2025 4% 98.20 1000 A Treasury note Tn1 June 30, 2023 3% 100:25 1000 Treasury note In2 June 30, 2025 4% 95:10 1000 Treasury bond Tb June 30, 2036 4% 80:10 1000 Note: Coupons are paid semi-annually. The last coupon will be paid on maturity date