4. You obtain information on three bonds issued by the government of Canada. All bonds have a face value of $1000 and pay coupons annually (if applicable). Security Bond 1 Maturity (years) Coupon rate Price Yield 1 0% $975 ? Bond 2 2 ? $1018.86 4% Bond 3 3 5% ? 5% (a) Find the missing information in the table above. (b) What is the term structure of spot rates for 1-year to 3-year maturity, i.e., 71, 72, and T3? (c) The government of Canada issues a new bond, Bond 4, which matures in two years, has a face value of $1000, and pays annual coupons at an annual rate of 6%. The bond is currently trading at $1040. Can you make an arbitrage profit in this situation? If so, how? Describe your strategy carefully. (d) Suppose you buy Bond 3 today and sell it in a year, right after collecting the coupon payment. What will be your one-year holding period return on Bond 3 if the term structure of spot rates a year from now is: r = 4%, r = 6%, 13 = 8%, where r stands for the i-th year spot rate a year from today?