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Question 2 (20 points) The current on-the-run bonds are as follows: Maturity (years) Annual Coupon Rate (%) Today's Market Value ($) .5 0 95 1 6 100 1.5 7 100 2 8 100 Face Value ($) 100 100 100 100 The .5-year maturity bond is a zero coupon bond. The other bonds are coupon bonds paying semiannual coupons. Given the information above: a) Derive the price today for six-month, one-year, eighteen-month, and 2-year-bond zero coupon securities with a $100 par value. b) Derive the yield (spot rate) of the four zero coupon securities in a). Give this rate as an annual percentage rate (APR). Hint: multiply the six-month period rate by 2 to get the annual rate. c) Derive the six-month forward rates in six months, and in eighteen months. Give these rates as annual percentage rates (APR). Question 2 (20 points) The current on-the-run bonds are as follows: Maturity (years) Annual Coupon Rate (%) Today's Market Value ($) .5 0 95 1 6 100 1.5 7 100 2 8 100 Face Value ($) 100 100 100 100 The .5-year maturity bond is a zero coupon bond. The other bonds are coupon bonds paying semiannual coupons. Given the information above: a) Derive the price today for six-month, one-year, eighteen-month, and 2-year-bond zero coupon securities with a $100 par value. b) Derive the yield (spot rate) of the four zero coupon securities in a). Give this rate as an annual percentage rate (APR). Hint: multiply the six-month period rate by 2 to get the annual rate. c) Derive the six-month forward rates in six months, and in eighteen months. Give these rates as annual percentage rates (APR)