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(C) 5. (a) Find the corresponding change in the instantaneous interest rate curve if the zero rate curve changes by S. (b) Consider r(0, t)

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(C) 5. (a) Find the corresponding change in the instantaneous interest rate curve if the zero rate curve changes by S. (b) Consider r(0, t) = 0.02+ 0.01 1 +t + 0.05 In(1 + t), and 8 = 0.001, 6 = 0.002. Find ri(t) and the corresponding change. 6. Assume that the continuously compounded instantaneous interest rate curve is given by ri(t) = 0.02 + 0.05 In(1 + 0.2t)

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