Question: {25 points} Below is the information from the par yield curve using on-the-run treasury bonds including one-yearT-bill and T-notes with maturities in year 2 and

{25 points} Below is the information from the par yield curve using on-the-run treasury bonds including one-yearT-bill and T-notes with maturities in year 2 and 5. Te rm to maturity in yea r 1 2 3 4 5 YTM 2.0% 3.0% 5.5% {A} {5 points) Use linear exploration to estimate the yield for 3-year and 4-year maturities on the par cu rye. {B} {10 points) Construct the spot rate curve from par curve using the bootstrapping method. {C} {5 points} Find the 1-year'forward rate Zyears from now, i.e., find f2, 3, based on the spot yield curve in B]. (D) {5 points) Use the spot rate curve to price a treasury bond with 4.5% annual coupon and 4 years to maturity

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