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5. Consider the following hypothetical spot curve: Maturity (years) 0.5 1.0 1.5 2.0 Spot Rate (%) 3.00 3.25 3.60 3.90 Use the spot rates to

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5. Consider the following hypothetical spot curve: Maturity (years) 0.5 1.0 1.5 2.0 Spot Rate (%) 3.00 3.25 3.60 3.90 Use the spot rates to calculate the arbitrage-free price of a 4% coupon, semi-annual, 2-year note from a similar credit quality issuer? If the price you calculate above is indeed the market value of the 4% coupon, semi-annual, 2-year note, what is its YTM? a. b

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