2. Bond pricing and YTM (12 points) (1) Suppose you wanted to invest in a 25-year bond which pays 3.45% annual coupons and has a face value of $50,000. Determine the fair price of the bond. Note that in order to answer this question you need to interpolate the yields between years 5-10, years 10- 15, years 15-20, and years 20-25. (9 points) (2) Plot on a chart the term structure of interest rates based on the yields given in Table 2 and the yields obtained through interpolations. (1.5 points) 2. Bond pricing and YTM (12 points) (1) Suppose you wanted to invest in a 25-year bond which pays 3.45% annual coupons and has a face value of $50,000. Determine the fair price of the bond. Note that in order to answer this question you need to interpolate the yields between years 5-10, years 10- 15, years 15-20, and years 20-25. (9 points) (2) Plot on a chart the term structure of interest rates based on the yields given in Table 2 and the yields obtained through interpolations. (1.5 points)