Calculate the semiannually$-$compounded $6-$month, $12-$month, and $18-$month

spot interest rates.

$($b$)$ What are the annual equivalent rates of the spot rates in $($a$)?$

$($c$)$ Is the term structure upward$-$sloping or downward$-$sloping or flat?

$($d$)$ If a one$-$year $4\%$ Treasury bond is priced at $99,$ is there an arbitrage opportu$-$

nity? If yes, how would you make an arbitrage profit?

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