A​ BBB-rated corporate bond has a yield to maturity of 10.8%. A U.S. Treasury security has a yield to maturity of 9.5%. These yields are quoted as APRs with semiannual compounding. Both bonds pay semiannual coupons at an annual rate of 10.2% and have five years to maturity.       a. What is the price​ (expressed as a percentage of the face​ value) of the Treasury​ bond? b. What is the price​ (expressed as a percentage of the face​ value) of the​ BBB-rated corporate​ bond? c. What is the credit spread on the BBB​ bonds? a. What is the price​ (expressed as a percentage of the face​ value) of the Treasury​ bond?   The price of the Treasury security as a percentage of face value is

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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A​ BBB-rated corporate bond has a yield to maturity of
10.8%.
A U.S. Treasury security has a yield to maturity of
9.5%.
These yields are quoted as APRs with semiannual compounding. Both bonds pay semiannual coupons at an annual rate of
10.2%
and have five years to maturity.      
a. What is the price​ (expressed as a percentage of the face​ value) of the Treasury​ bond?
b. What is the price​ (expressed as a percentage of the face​ value) of the​ BBB-rated corporate​ bond?
c. What is the credit spread on the BBB​ bonds?
a. What is the price​ (expressed as a percentage of the face​ value) of the Treasury​ bond?
 
The price of the Treasury security as a percentage of face value is
$________________
​(Round to two decimal​ places.)
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