d. What is the net return that this investor will get from his $1 million future cash flow from t=1 to t=2? Compare it with the forward and comment on what you find. 2. Suppose that we have two Treasury securities traded in the market, and we need to use them to calculate the theoretical spot rates. The first Treasury is a one-year zero, which pays $1,000 at t=1, and the current price is $950. The second Treasury is a two-year maturity, 5% coupon bond, and its current price is $900. The par value of the second Treasury is $1,000. Calculate the one-year spot rate and two-year spot rate, assuming that coupon payments are annual. 3. The table below presents the spot rates an investor faces. Year Spot rates 2% 3% 4% 5% a. What is the price of a two-year maturity 5% annual coupon bond? Par value is $1,000. What is its YTM? b. What is the price of a two-year maturity 10% annual coupon bond? Par value is $1,000. What is its YTM