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Assume semi-annual compounding. We know that 6-month T-bill is trading at a yield of 2%; 12-month T-bill is trading at a yield of 2.5%; 3%-coupon
Assume semi-annual compounding. We know that 6-month T-bill is trading at a yield of 2%; 12-month T-bill is trading at a yield of 2.5%; 3%-coupon 18-month T-note is trading at par ($100); 3.4%-coupon 2-year T-note is trading at par ($100). With the above information, compute the 2-year spot rate. Assume semi-annual compounding. Round your answer to 4 decimal places. For example if your answer is 3.205%, then please write down 0.0321.
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