1) The following bonds are available for purchase: | Term Coupon Price Coupon 1 year 6% (semi-annual) $98.95 Coupon 2 years 2% (semi-annual) $88.05 Zero 1 years $93.25 Coupon 2 years | 4% (semi-annual) $91.66 All have a face value of $100. At what rate, today, would I have to agree to borrow for the time period from 18 months 2 years? Create a bond portfolio that cost nothing at time 0, 6 months and 1 year, costs some money at time 18 months (how much?), and pays $100 at time 2 years. HINT: set up a system of equations for times 0, 0.5, 1, 2 to find the number of each bond to buy/sell. Use the solution to find how much it costs at time 1.5. 1) The following bonds are available for purchase: | Term Coupon Price Coupon 1 year 6% (semi-annual) $98.95 Coupon 2 years 2% (semi-annual) $88.05 Zero 1 years $93.25 Coupon 2 years | 4% (semi-annual) $91.66 All have a face value of $100. At what rate, today, would I have to agree to borrow for the time period from 18 months 2 years? Create a bond portfolio that cost nothing at time 0, 6 months and 1 year, costs some money at time 18 months (how much?), and pays $100 at time 2 years. HINT: set up a system of equations for times 0, 0.5, 1, 2 to find the number of each bond to buy/sell. Use the solution to find how much it costs at time 1.5