How to solve (c) and (d) ?

16. You are a bond trader and see on your screen the following information on three bonds with annual coupon payments and par value of $100: Bond Coupon rate (% Oto Maturity (year) YTM(%) 5.00 5.50 6.00 WNL Coupon payments are annual. (a) What are the prices of the above bonds? (b) Construct the current term-structure of spot interest rates. (c) Explain how you would synthetically replicate a zero-coupon bond with a maturity of 3 years and a par value of $100. (d) What should be the price of the bond so that there is no arbitrage? 16. You are a bond trader and see on your screen the following information on three bonds with annual coupon payments and par value of $100: Bond Coupon rate (% Oto Maturity (year) YTM(%) 5.00 5.50 6.00 WNL Coupon payments are annual. (a) What are the prices of the above bonds? (b) Construct the current term-structure of spot interest rates. (c) Explain how you would synthetically replicate a zero-coupon bond with a maturity of 3 years and a par value of $100. (d) What should be the price of the bond so that there is no arbitrage