1. Using the following spot yield curve, calculate the forward breakeven rate for a zero coupon bond maturing in 2 years and reinvesting in another 3 year zero coupon bond versus buying a 5 year zero coupon bond today:

Year Spot Yld

1 0.33%

2 0.62%

3 0.93%

4 1.15%

5 1.42%

2. Calculate the treasury zero (spot) curve using the following par yield curve.

Year Price Par Yield Spot Yield

1 99.75 0.25% 0.25%

2 100.00 0.63% ???

3 100.00 0.88% ???

4 100.00 1.10% ???

5 100.00 1.38% ???

3. Explain how each of the following factors, all else equal, affect the duration and briefly explain why?

a. Maturity

b. Coupon

c. Yield to Maturity

4. Assume a 7 year maturity, 5% coupon bond with a yield to maturity of 3.5%

a. Calculate the bonds effective duration using a 50 basis point shock to the yield.

b. Assuming a 0.75% decline in yield, calculate the estimated % change in price for the bond using your answer in part a.

c. Explain why the estimated change in price using only duration is not accurate.

5. Assume a 10 year bond, callable at par in 4 years, with a 5% coupon and a clean dollar price of $115

a. Calculate the Yield to Maturity

b. Calculate the Yield to Call

6. Assume a Aa1 rated, $25,000 par value 6% coupon with 10 years to maturity bond is being offered. The yield on similar 10 year Aa1 rated paper is currently 4.0%.

a. Calculate the full market value of the bond.

b. Calculate the clean dollar price of the bond.

Yes, please answer the rest question. Thank you.