Question: Actuary problem. I provided the answer, please help me to get the answer process. 2. You are told that the one-year spot rate is 4%

Actuary problem. I provided the answer, please help me to get the answer process.

2. You are told that the one-year spot rate is 4% and the two-year spot rate is 5%. A newly issued bond 3-year bond with face value 100 and annual coupons of 6 sells for 99. (a) Find the three- year spot rate, (b) Find the effective annual yield to maturity. Answer: (a) so(3) = 6.485%; (b) YTM=6.377%

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