Consider a bond with the following characteristics:

• Bond maturity date is July-31, 2040.
• Coupon rate is 2.5%, and coupons are paid semi-annually.
• The bond is trading at a YTM of 2%.
• The day-count convention is 30/360.
• Redemption value is 100. Assume face value is also 100.

What is the price that an investor has to pay to buy this particular bond if the settlement date is November-1, 2018? Assume semi-annual compounding.

Round your answer to the nearest cent (2 decimal places).

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.