Question: Problem 1 (14 points): Consider the following information about four bonds and assume they are priced correctly: Time to maturity Coupon rate Bond #1

Problem 1 (14 points): Consider the following information about four bonds and

Problem 1 (14 points): Consider the following information about four bonds and assume they are priced correctly: Time to maturity Coupon rate Bond #1 0.5 5% Bond #2 1 9% Bond #3 Bond #4 20 20 8% 4% Price 100.59 104.76 123.11 80.89 a) (2 points) Find a 6-month spot interest rate. Keep at least 6 decimal digits while performing your calculations b) (2 points) Find a 1-year forward interest rate. Keep at least 6 decimal digits while performing your calculations c) (2 points) Find a 1-year spot interest rate. Keep at least 6 decimal digits while performing your calculations d) (2 points) Find a 20-year spot interest rate. Keep at least 6 decimal digits while performing your calculations.

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