6.Namibias Treasury Bills represent a significant proportion of most portfolios of financial institutions. On realizing this fact, you have decided to analyse the yield curve for treasury bonds. The following table provides the necessary data;

Years to Maturity Par coupon yield to mAturity (%) Calculated spot rates (%) Calculated forward rates (%)

1 5.00 5.00 5.00

2 5.20 5.21 5.42

3 6.00 6.05 7.75

4 7.00 7.16 10.56

5 7.00 ? ?

a) Using the data in the table, calculate the five year spot rate and the five year forward rate assuming annual compounding . [2]]