1.(4points) Use the market YTM for the 10 year 7.125% annual coupon Treasury note and the market YTM of the 10 year 8.5% Ferguson Corp. notes to calculate the market prices for these two notes

Prices IS IESUT of the effective annually compounded spot rates below. r0,1 = 9.49% r0,2 = 8.90% r0,3 = 8.40% r0,4 = 8.00% r0,5 = 7.70% r0,6 = 7.50% r0,7= 7.30% r0,8 = 7.15% ro9= 7.00% r0,10 = 6.98% In this market, a 10 year 7 1/8% (7.125%) annual coupon Treasury note sells at a market price that results in an effective annual YTM of 7.16% Ferguson Corp. has just issued 10 year 8 42% (8.50%) annual coupon notes in the primary market at a market price that results in an effective annual YTM of 8.44%. You are a portfolio manager and you own the following three 10 year Ferguson Corp. Notes in your portfolio: 10 year 2% annual coupon notes 10 year 6% annual coupon notes 10 year 12% annual coupon notes Prices IS IESUT of the effective annually compounded spot rates below. r0,1 = 9.49% r0,2 = 8.90% r0,3 = 8.40% r0,4 = 8.00% r0,5 = 7.70% r0,6 = 7.50% r0,7= 7.30% r0,8 = 7.15% ro9= 7.00% r0,10 = 6.98% In this market, a 10 year 7 1/8% (7.125%) annual coupon Treasury note sells at a market price that results in an effective annual YTM of 7.16% Ferguson Corp. has just issued 10 year 8 42% (8.50%) annual coupon notes in the primary market at a market price that results in an effective annual YTM of 8.44%. You are a portfolio manager and you own the following three 10 year Ferguson Corp. Notes in your portfolio: 10 year 2% annual coupon notes 10 year 6% annual coupon notes 10 year 12% annual coupon notes