1 (Required, 20 marks) The following table shows the current spot rates with various maturities. Spot rate 6 months 2.1% 1 year 2.25% 18 months 2.4% 2 years 2.7% We consider a 2-year coupon bond. The face value of the bond is $1000 and the annual coupon rate is 4.6% payable semi-annually. (a) Calculate the current price of the bond. (b) Suppose that all spot rates are dropped uniformly by 0.3% after 1 year, calculate the annual effective yield rate of the bond at that time. Show all calculation