Show formulas and work for each answer. PLEASE ANSWER B,C, and D. Thank you!

The following are market spot rates on risk-free debt: 0R1=.07 0R2=.05 0R3=.02

A. (2 points) What do these spot rates suggest about the economy? Select one: A future increase in inflation. Interest rates will rise in the future. A future booming economy. A steady economy. A future recession. Ambiguous. It is impossible to say from these spot rates.

B (1 point) A risk-free bond matures in three years, has a coupon rate of 8%, and a face value of $1,000. The bond coupon payment is Select one: .02 .05 .07 .08 $20 $50 $70 $80 $1,000 $1,020 $1,050 $1,070 $1,080 $1,200 $1,500 $1,700 $1,800

C (1 point) The total payment received from the bond at T=3 is Select one: $20 $50 $70 $80 $1,000 $1,020 $1,050 $1,070 $1,080 $1,200 $1,500 $1,700 $1,800 Q 20 Question 20 (4 points) The bond price at T=0 is Select one: $222.72 $816.51 $942.32 $1,000.00 $1,137.19 $1,026.24 $1,165.04

D (4 points) What is the YTM (yield to maturity)? Select one: 2.00% 2.25% 5.00% 5.25% 7.00% 7.25% 8.00%