Estimate a polynomial yield curve, based on the data on spot interest rates for maturities of 1 - 13 included in the spreadsheet.

What is the implied 6.5-year spot interest rate?

Hint: we have provided a step-by-step guide in the spreadsheet.

Question 24: Please estimate a polynominal yield curve with the following data The equation to be estimated Years Spot Interest rates -7.05% 3.139 0.00% -0.80% v. = a + Bit + B2tz + Bat3 -0.25% 0.07% 0.37% 0.62% 0.83% 1.02% 1.07% 1.20% 1.34% Step 1: Create the "dependent variable" and "independent variables" Spot rates implied by the 120.0% polynomial function 100.0% 80.0% 60.0% 40.0% 20.0% 0.0% 0.2 0.4 0.6 0.8 1.2 +Actual Interest rate -Spot rates implied by the polynomial function Step 2: Use the "regression function" in the "Data analysis" tab to estimate the coefficients, following the regression equation specified above. In the "output option", select cell B45 in "output range". Step 3: Using the coefficients that you just estimated, calculate the spot rate for a maturity of 6.5 years implied by the polynomial function. Maturity (years): Implied spot rate from the polynomial function