Question: 13) There are two bonds that have a face value of $100 and pay annual coupons. Their times to maturity (in years) are: t1 =

13) There are two bonds that have a face value of $100 and pay annual coupons. Their times to maturity (in years) are: t1 = 1 and t2 = 2. The coupon values are: c1 = 5% and c2 = 6%. Their yields to maturity are: y1 = 5% and y2 = 8%.

What is the spot rate for year one?

What is the spot rate for year two?

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