We have the following table

Year	YTM	Spot rate
1	2.0%	2.0%
2	2.5%	2.5%
3	3.0%	3.21%
4	3.5%
5	4.0%
6	4.5%
7	5.0%	5.22%
8	5.5%	5.83%
9	6.0%	6.48%
10	6.5%	7,18%

By using the bootstrapping method. Find the spot rates for years 4, 5 and 6.

Find the following forward rates from the information given in the table along with your calculations from a)

a) 1 year forward rate, 2 years from now

b) 2 year forward rate, 4 years from now

c) 4 year forward rate, 6 years from now

d) 6 year forward rate, 3 years from now

Answer rating: 100% (QA)

To find the spot rates for years 4 5 and 6 using the bootstrapping method we can interpolate between the given spot rates and use the yields to maturi... View the full answer