Question: Question 1 (This question is to help you learn to understand and use bond-pricing formulas) a) A two-year treasury bill, F=$100, P=$102, has annual coupon

Question 1 (This question is to help you learn to
Question 1 (This question is to help you learn to understand and use bond-pricing formulas) a) A two-year treasury bill, F=$100, P=$102, has annual coupon payments, and the annual coupon rate is 5%. What is the base annual interest rate, r, of this treasury bill? b) Company ABC has issued a two-year corporate bond, F=$100, P=$98, which has annual coupon payments. The annual coupon rate is 5%. What is the annual yield, y, of the corporate bond? c) What is the spread of this corporate bond? d) Company XYZ also has a two-year corporate bond outstanding with F=$100 and annual coupon payments of $5 as well. The spread of this bond appears to be 5.1% on the bond market. Without calculation, answer whether the price of company XYZ's bond is higher or lower than $98. e) Which company, ABC or XYZ, is believed to have higher default risk? And why

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