G spread

CFA Level I Fixed Income
#1

Canadian government benchmark bond

Coupon rate: 3.0%
Price 101
years to maturity: 2

Canadian government bond

Coupon rate: 5.0%
Price 102
Years to maturity: 2

Assuming annual compounding, the g-spread is closest to:

A. 146bps
B. 200BPS
C. 248BPS

Can i know why the answer is A. the answer explaination makes me confuse.

#2

Calculate the YTM for each bond and take the difference. This is just plug 'n chug on your calculator.

YTM of benchmark is 2.484%, YTM of government bond is 3.95%. The difference is 1.46%.