2. Given the following discount prices Discount prices d .90 d2 .80 d3 .70 d .60 a. Calculate the annually compounded spot rates for year 1, 2, 3, and 4. b. What is the semi-annually compounded yield to maturity of the 2-year bond? 3. Suppose you commit to buy a 4-year treasury bond at a discount price of $0.96 two years from now. What is the 4-year forward rate two-years from now? 4. Today you buy Microsoft at $215.37. You intend to hold this stock for four years. In order for you to earn average 7% per year over the next four years (and receive no dividends) what price must you sell it for at the end of four years? 5. You buy Microsoft at 215.37. Four years later you sell it for $265. What rate of return have you earned per year over your holding period?