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12/2/2018 4. (25 pts) Consider the spot curve for hypothetical annual-coupon U.S. Treasury securities given in the table below (only the first 5 years of

12/2/2018 4. (25 pts) Consider the spot curve for hypothetical annual-coupon U.S. Treasury securities given in the table below (only the first 5 years of the curve are provided). Calculate the missing one-year forward rates f(T*,1) indicated by "????" and add them to the table. Show your work for all calculations in the space below the table Spot Rate (%) 5.50 6.02 6.55 6.87 7.20 Forward Rate (%) 5.50 Year 1.0 2.0 3.0 4.0 5.0

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