(a) Recall that spot rates are usually calculated for six-month intervals and then annualized by doubling the six month rate. The spot rate for a zero- coupon bond that matures on months from now is given by So.n = 2[(F/P)1 - 1], where F is the face value of the bond and P is its current value. Determine $0,20 , the spot rate of a 10-year zero-coupon bond, by forming a portfolio of the following bonds: Bond A is a 10-year zero-coupon bond with face value FA = $100, coupon rate r = 10%, m = 2 (so it pays $ 5 every six months), and current price Pa = $98.72. Bond B is a 10-year bond with face value FB = $100, coupon rate r = 8%, m = 2 (so it pays $ 4 every six months), and current price PB = $85.89. (a) Recall that spot rates are usually calculated for six-month intervals and then annualized by doubling the six month rate. The spot rate for a zero- coupon bond that matures on months from now is given by So.n = 2[(F/P)1 - 1], where F is the face value of the bond and P is its current value. Determine $0,20 , the spot rate of a 10-year zero-coupon bond, by forming a portfolio of the following bonds: Bond A is a 10-year zero-coupon bond with face value FA = $100, coupon rate r = 10%, m = 2 (so it pays $ 5 every six months), and current price Pa = $98.72. Bond B is a 10-year bond with face value FB = $100, coupon rate r = 8%, m = 2 (so it pays $ 4 every six months), and current price PB = $85.89