Question: Using bootstrap method calculate zero coupon yield curve from coupon bearing bonds. Coupons are paid every half year. They are shown annualized in percent.

Using bootstrap method calculate zero coupon yield curve from coupon bearing bonds. Coupons are paid every half year. They are shown annualized in percent. Use continuous compounding and then semiannual compounding. Plot two yield curves for continuous and semiannual compounding. Bond Principal Maturity (years) Coupon Bond Price 100 100 100 100 100 0.25 0.50 1.00 1.50 2.00 0 0 0 3 4 99.1 98.25 98.1 98.25 98.125

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