B1	B2	B3	B4	B5	B6	B7	B8	B9	B10
5	6	7	8	9	99	100	101	102	103

B. Estimate term structure of discount factors, spot rates and forward rates by using data on five semi-annual coupon paying bonds with $100 face value each: The bonds, respectively, have 1.25, 5.35, 10.4, 15.15 and 20.2 years to maturity; pay coupon at annual rates of B1, B2, B3, B4, and B5 percent of face value; and are trading at quoted spot market prices in dollars of B6, B7, B8, B9 and B10. Specify the discount factor function d(t) by a third degree polynomial with unknown parameters a, b, and c, as done in class. Using estimated d(t) function, determine spot rate and forward rate functions by assuming half-year compounding. Then write the values of the following based on your estimation.

1. Coefficient of parameter a in first bond price equation.

2. Coefficient of parameter b in first bond price equation.

3. Coefficient of parameter c in first bond price equation.

4. Coefficient of parameter a in second bond price equation.

5. Coefficient of parameter b in second bond price equation.

6. Coefficient of parameter c in second bond price equation.

7. Coefficient of parameter a in third bond price equation.

8. Coefficient of parameter b in third bond price equation.