Question: please compute using a TI-84 plus calculator Given the following yields for bonds with different credit ratings: Credit Rating Yield AAA 3% AA 3.2% A

please compute using a TI-84 plus calculator

Given the following yields for bonds with different credit ratings:

Credit Rating Yield
AAA 3%
AA 3.2%
A 3.5%
BBB 3.8%
BB 4.5%
B 5.25%

a. What would be the fair price of a 5-year maturity bond, which currently has identical risk to a bond rated A, if it has a coupon rate of 12% paid annually, and a par value of $1,000?

b. What would be the price of the same bond 3 years from today if the bond is expected to be downgraded to BBB at the end of the 3rd year?

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