Question: Exercise 1.1 Term Structure Construction For the Treasury curve with the data given below. Tenor Coupon Freq Mkt Price 1 2 3 5 7 10

Exercise 1.1 Term Structure Construction For the Treasury curve with the data given below. Tenor Coupon Freq Mkt Price 1 2 3 5 7 10 20 30 a) Estimate the forward rates assuming they are piecewise constant. b) Estimate the forward rates assuming they are linear continuous. Ending forward rate for interval equals the starting forward rate for next interval. c) Plot the forward rates and discount factors for both methods

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