5.34. The following table gives the prices of bonds:

a. Calculate zero rates for maturities of 6 months, 12 months, 18 months, and 24 months.

b. What are the forward rates for the periods: 6 months to 12 months, 12 months to 18 months, 18 months to 24 months?

c. What are the 6-month, 12-month, 18-month, and 24-month par yields for bonds that provide semiannual coupon payments?

d. Estimate the price and yield of a two-year bond providing a semiannual coupon of 7% per annum.

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Bond principal ($) Time to Annual Bond maturity coupon price (years) ($)* (S) 100 0.50 0.0 98 100 1.00 0.0 100 1.50 6.2 95 101 100 2.00 8.0 104