$2.$ Use the term structure of interest rates shown below represent the spot rates for

$1-,2-,3-,4-,$ and $5-$year zero$-$coupon bonds. below to solve question $2.$

Maturity $($years$)$ Zero Coupon aka Spot

Interest Rate

Discount Factor $($assuming

semi$-$annual

compounding$)$

$13\mathrm{.}5\%$

$23\mathrm{.}55\%$

$33\mathrm{.}60\%$

$43\mathrm{.}75\%$

$53\mathrm{.}80\%$

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