Question: Exercise 4. Consider the following information about the U.S. Treasury Securities: Maturity (in years) 0,5 Coupon rate 0% Price Yield to Maturity $ 96,15

Exercise 4. Consider the following information about the U.S. Treasury Securities: Maturity

Exercise 4. Consider the following information about the U.S. Treasury Securities: Maturity (in years) 0,5 Coupon rate 0% Price Yield to Maturity $ 96,15 8,0% 1 0% $ 92,19 8,3% 1,5 2 2,5 8,5% $ 99,45 8,9% 9,0% $ 99,64 9,2% 11,0% $ 103,49 9,4% a) Calculate the theoretical 1.5-year spot rate based on the data outlined in the table. b) Calculate the theoretical 2-year spot rate based on the data outlined in the table. (10 points) (10 points)

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