Question: Suppose that the bond table was published on May 15 2001, and the bid price for Clearn bonds is based on the assumption that the

Suppose that the bond table was published on May 15 2001, and the bid price for Clearn

bonds is based on the assumption that the spot interest rate will remain constant until the

date of maturity. What is the value of the spot interest rate?

picture below, which shows a typical bond table from a financial newspaper. Coupon Mat. date Bids Yld% Corporate AGT Lt 8.800 Sep 22/25 100.46 8.75 Air Ca 6.750 Feb 02/04 94.00 9.09 AssCap 5.400 Sep 04/01 100.01 5.38 Avco 5.750 Jun 02/03 100.25 5.63 Bell 6.250 Dec 01/03 101.595.63 Bell 6.500 May 09/05 102.01 5.95 BMO 7.000 Jan 28/10 106.55 6.04 BNS 5.400 Apr 01/03 100.31 5.24 BNS 6.250 Jul 16/07 101.56 5.95 CardTr 5.510 Jun 21/03 100.52 5.27 Cdn Pa 5.850 Mar 30/09 5.850 Mar 30/09 93.93 6.83 Clearn 0.000 May 15/08 88.50 8.61 CnCrTr 5.625 Mar 24/05 99.78 5.68 Coke 5.650 Mar 17/04 99.59 5.80

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