a. (4 points) You are given the following yield curve (spot rates at different maturities). All rates are semiannually compounded. The annual coupon rate of a one-year bond is 6%. The coupons are paid semiannually and the face value of the bond is $100. What is the price of this bond? Maturity (year) Spot Rate 0.5 4% 4.5% 1.5 5% 2 5.5% b. (6 points) The table shows a new set of zero coupon bonds: Maturity (year) 0.5 1 1.5 Price 99 96 93 Please (i) determine spot rates of the three zero coupon bonds on the table; (ii) If you wish to issue a 1.5-year bond that pays coupons semiannually, what coupon rate will you set so that this bond's price equals to face value of $100? a. (4 points) You are given the following yield curve (spot rates at different maturities). All rates are semiannually compounded. The annual coupon rate of a one-year bond is 6%. The coupons are paid semiannually and the face value of the bond is $100. What is the price of this bond? Maturity (year) Spot Rate 0.5 4% 4.5% 1.5 5% 2 5.5% b. (6 points) The table shows a new set of zero coupon bonds: Maturity (year) 0.5 1 1.5 Price 99 96 93 Please (i) determine spot rates of the three zero coupon bonds on the table; (ii) If you wish to issue a 1.5-year bond that pays coupons semiannually, what coupon rate will you set so that this bond's price equals to face value of $100