Question: PLEASE DONT ANSWER 3) Suppose a one-year zero coupon corporate bond currently sells for $900. The par value of the bond is $1000. Suppose there

PLEASE DONT ANSWER

3) Suppose a one-year zero coupon corporate bond currently sells for $900. The par value of the bond is $1000. Suppose there is 5% chance that the firm will default and the bondholders will receive $500 if the firm defaults. If the YTM on a one year zero-coupon treasury bond is 5.26%

a. What is the YTM for the corporate bond? b. What is the credit spread of the corporate bond?

b. What is the credit spread of the corporate bond?

7) The yield to maturity of a $1000 bond with a 7% coupon rate, semiannual coupons, and two years to maturity is 7.6%. What must its price be?

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