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4. (25 pts) Consider the spot curve for hypothetical annual-coupon U.S. Treasury securities given in the table below (only the first 5 years of the

4. (25 pts) Consider the spot curve for hypothetical annual-coupon U.S. Treasury securities given in the table below (only the first 5 years of the curve are provided). Calculate the missing one-year forward rates f(T*,1) indicated by ???? and add them to the table. Show your work for all calculations in the space below the table.

Year

Spot Rate (%)

Forward Rate (%)

1.0

5.50

5.50

2.0

6.02

????

3.0

6.55

????

4.0

6.87

????

5.0

7.20

????

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