Question: 1. Use the following information to bootstrap the term structure. Identify the spot rates. All bonds make semi-annual coupon payments and all rates must

1. Use the following information to bootstrap the term structure. Identify the

1. Use the following information to bootstrap the term structure. Identify the spot rates. All bonds make semi-annual coupon payments and all rates must be expressed as semi-annual APRs. (10 points) Coupon Maturity Bond Price Rate (years) 1 1.0% 0.5 98.00 2 3.0% 1.0 98.00 3 2.0% 1.5 96.00 4 2.0% 2.0 95.00 5 4.0% 2.5 99.00 6-month spot rate Zox0.5 = 1-year spot rate Zox1 = 1.5-year spot rate Zox1.5 = 2-year spot rate Zox2 = 2.5-year spot rate Zox2.5 =

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