The following table shows the current prices for a set of government bonds with

different maturities as of January $1,2022.$ The bonds are identical in every respect

except for their time to maturity and coupon rate. All of the bonds will be redeemed

at their par value of $100$ upon redemption. Assume that coupon payments are paid

annually for simplicity.

Compute the yield to maturity $($YTM$)$ for these bonds.

Estimate the theoretical spot rates and draw the theoretical spot rate curve. Critically

evaluate how the curve describes the implications in terms of the expectations as

well as the liquidity preference hypotheses.

Compute the implied forward two$-$year rate of interest at January $1,2023.$ Describe

the conditions under which the calculated forward rate would be an unbiased

estimate of the two$-$year spot rate of interest at January $1,2023.$