6. Suppose that the prevailing Treasury spot rate curve is the one shown below: Spot rate curve Semi-annual period EBOO voer A WN Annualized spot rate 3.000% 3.300% 3.505% 3.916% 4.438% 4.752% 4.962% 5.065% 5.170% 5.277% 5.386% 5.498% 5.611% 5.664% 5.719% 5.776% G a. What is the value of a 7.4% semi-annual 8-year Treasury issue? b. Suppose that the 7.4% 8-year Treasury issue is priced in the market based on the on-the-run 8-year Treasury yield. Assume further that yield is 5.65%, so that each cash flow is discounted at 5.65% divided by 2. What is the price of the 7.4% 8-year Treasury issue based on a 5.65% discount rate? c. Given the arbitrage-free value found in part a and the price in part b, what ac- tion would a dealer take and what would the arbitrage profit be if the market priced the 7.4% 8-year Treasury issue at the price found in part b? d. What process assures that the market price will not differ materially from the arbitrage-free value