2. The following table lists the coupon rate of the par yield curve. (1 year rate is the yield to maturity on the zero coupon bond, others are based on coupon bond). Year Coupon rate le 1% 2e 2% 32 3% 16 Assuming annual compounding and coupon payment: a) Compute the 2-year and 3-year spot rates. b) Based on the spot rates computed above, calculate the theoretical price of a 3-year 4% coupon bond, with annual coupon payment. (Assuming face value is $1,000). 2. The following table lists the coupon rate of the par yield curve. (1 year rate is the yield to maturity on the zero coupon bond, others are based on coupon bond). Year Coupon rate le 1% 2e 2% 32 3% 16 Assuming annual compounding and coupon payment: a) Compute the 2-year and 3-year spot rates. b) Based on the spot rates computed above, calculate the theoretical price of a 3-year 4% coupon bond, with annual coupon payment. (Assuming face value is $1,000)