Consider the following Treasury spot rates (APR, compounded semiannually): Years Spot rate 0.5 0.020 1 0.023 1.5 0.025 2 0.029 2.5 0.034 0.038 0.040 0.041 0.042 0.043 3 3.5 4 4.5 5 Calculate the nominal spread and Z-spread of a 6.5% coupon (paid quarterly), 5-year corporate bond, currently trading at $102 (per $100 par). Briefly discuss the differences between the two spread measures and why these differences exist.