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6. Consider the following bonds where coupon payments are annual. (20 pts) Bond Coupon rate (%) Maturity (years) YTM (%) W 0 1 5 X

6. Consider the following bonds where coupon payments are annual. (20 pts) Bond Coupon rate (%) Maturity (years) YTM (%) W 0 1 5 X 5 2 5.5 Y 6 3 3 6 a) Construct the current term-structure of spot interest rates. (10 pts) b) Explain how you would synthetically replicate a zero-coupon bond with a maturity of 3 years and a par value of $100. (10 pts)

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