The following table summarises the yields to maturity on several one-year, zero-coupon securities: Security Treasury AAA...

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The following table summarises the yields to maturity on several one-year, zero-coupon securities: Security Treasury AAA corporate BBB corporate B corporate Yield (%) a. What is the price (expressed as a percentage of the face value) of a one-year, zero-coupon corporate bond with a AAA rating? b. What is the credit spread on AAA-rated corporate bonds? c. What is the credit spread on B-rated corporate bonds? d. How does the credit spread change with the bond rating? Why? 3.09 3.15 4.17 4.90 a. The price of this bond will be %. (Round to the nearest cent.) b. The credit spread on AAA-rated corporate bonds is %. (Enter your response as a percent rounded to two decimal places.) c. The credit spread on B-rated corporate bonds is %. (Enter your response as a percent rounded to two decimal places.) d. How does the credit spread change with the bond rating? Why? A. The credit spread increases as the bond rating falls because lower-rated bonds are riskier. B. The credit spread decreases as the bond rating falls because lower-rated bonds are riskier. C. The credit spread increases as the bond rating rises because higher-rated bonds are riskier. D. The credit spread decreases as the bond rating rises because higher-rated bonds are riskier. The following table summarises the yields to maturity on several one-year, zero-coupon securities: Security Treasury AAA corporate BBB corporate B corporate Yield (%) a. What is the price (expressed as a percentage of the face value) of a one-year, zero-coupon corporate bond with a AAA rating? b. What is the credit spread on AAA-rated corporate bonds? c. What is the credit spread on B-rated corporate bonds? d. How does the credit spread change with the bond rating? Why? 3.09 3.15 4.17 4.90 a. The price of this bond will be %. (Round to the nearest cent.) b. The credit spread on AAA-rated corporate bonds is %. (Enter your response as a percent rounded to two decimal places.) c. The credit spread on B-rated corporate bonds is %. (Enter your response as a percent rounded to two decimal places.) d. How does the credit spread change with the bond rating? Why? A. The credit spread increases as the bond rating falls because lower-rated bonds are riskier. B. The credit spread decreases as the bond rating falls because lower-rated bonds are riskier. C. The credit spread increases as the bond rating rises because higher-rated bonds are riskier. D. The credit spread decreases as the bond rating rises because higher-rated bonds are riskier.