Derive the theoretical spot rate curve as shown in Exhibit 5-6 from Exhibit 5-5 by using bootstrapping for (yearly) spots rates of 0.5 years, 1 year, 1.5 years and 2 years.

Exhibit 5-5 Maturity and Yield to Maturity for 20 Hypothetical Treasury Securities Period Years Yield to Maturity/ Coupon Rate (%) 0.5 1.0 1.5 2.0 2.5 5.25 5.50 5.75 6.00 6.25 6.50 6.75 6.80 3.0 3.5 4.0 4.5 7.00 5.0 7.10 5.5 6.0 7.0 7.5 7.15 7.20 6.5 7.30 7.35 7.40 8.0 7.50 8.5 7.60 9.0 7.60 19 9.5 7.70 10.0 7.80 "All bonds with the exception of the six-month and one-year issues are at par (100). For these issues the coupon rate is equal to the yield to maturity. The six-month and one-year issues are zero-coupon instruments that have a price less than par value. Exhibit 5-6 Theoretical Spot Rates Period Years Spot Rate (%) 0.5 1.0 5.25 5.50 5.76 6.02 6.28 6.55 6.82 6.87 7.09 3.5 4.0 4.5 7.20 5.5 6.0 6.5 7.0 7.26 7.31 7.43 7.48 7.54 7.67 7.5 8.0 8.5 9.0 9.5 10.0 7.80 7.79 7.93 8.07