Question: Problem 6.6 You are given the following n-year forward rates: n forward rate 3.0 % 11 4.4 % 21 4.8% 31 5.6 % By convention,

Problem 6.6 You are given the following n-year forward rates: n

Problem 6.6 You are given the following n-year forward rates: n forward rate 3.0 % 11 4.4 % 21 4.8% 31 5.6 % By convention, the 0-year forward rate is just the current spot rate so(1) (for a 1-year period) (a) Find the implied spot rates so(2), 8o(3), 8o(4) (b) A 4-year 1,000 par bond is issued with 5% annual coupons. Find the price of the bond by using the spot rates computed in (a). (c) What is the yield to maturity of the bond in (b)

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