6. Based on the information below about treasury securities, what should be the 6-month and 1- year spot rates? Par value is $100. Interest rates quoted are annual rates, compounded semi- annually. Coupon Maturity (yrs) 0.5 rate Price Spot Rate na $98.04 1 na 1.5 4.5% $100 4.51% a. 2%, 2.05% b. 2%, 2.15% c. 4%, 4.1% * d. 4.5%, 4.70% e. 4%, 4.70% 7. If the current one year spot rate is 4% and the forward rates for next four years 2, 3, 4, 5 are 5%, 7%, 8%, and 6%, respectively, then today's interest rate on a five-year bond should be: (Assume that interest rates are compounded annually) a. 4% b. 5% c. 6% d. 7% e. 8% * 10. Teddy Tom has a mortgage loan for 1.5 years with principal amount of $100. He has decided to make a 50% prepayment at t=0.5. The annual mortgage rate is 3%, semi-annual compounded. Find the first scheduled total payment and ending balance for Teddy Tom at t=0.5 First Scheduled total Payment, t=0.5 Ending Balance, t=0.5 a. 30.34 33.58 b. 30.34 36.58 C. 28.35 36.58 d. 34.34 33.58 * e. 34.34 32.83