Exercise . Find a list of current price quotes on government bonds at an exchange in your country. Derive as many discount factors and zero-coupon yields as possible using only the no-arbitrage pricing principle, that is the bootstrapping approach.

Exercise . Consider a bond market in which  bullet bonds are traded. They all have a face value of ,, a coupon rate of %, annual payments, and exactly one year to the next payment date. The bonds mature in , , ... ,  years. The current prices are given in the following table.

Maturity Price Maturity Price

 .  .

 .  .

 .  .

 .  .

 .  .

Use the bootstrapping approach to determine the discount factors B T, the annually compounded zero-coupon yields yˆ

T, and the annually compounded one-year forward rates ˆf T−,T for T = , , ... , .