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2. (20 points) Ashley has a bond with annual coupons to be paid at an annual coupon rate of 0.05 for 5 years, with the

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2. (20 points) Ashley has a bond with annual coupons to be paid at an annual coupon rate of 0.05 for 5 years, with the first coupon payment occuring one year from today. The face value of this bond is 5,000, as is its redemption value. Given the following yield curve, calculate the current price of his bond. 1 2 3 4 5 6 7 Term to maturity t Spot rate st 6% 5.5% 5% 4.5% 4% 3.5% 3%

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