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Downward Sloping Yield Curve Maturity Coupon Price Yield-to-Maturity Spot Rate 0.5 0 - 3.90 3.90 1.0 0 - 3.50 3.50 1.5 3.30 100 3.30 ?
Downward Sloping Yield Curve
Maturity | Coupon | Price | Yield-to-Maturity | Spot Rate |
0.5 | 0 | - | 3.90 | 3.90 |
1.0 | 0 | - | 3.50 | 3.50 |
1.5 | 3.30 | 100 | 3.30 | ? |
2.0 | 3.00 | 100 | 3.00 | ? |
2.5 | 2.80 | 100 | 2.80 | ? |
Compute the Spot Rates for the last 3 Rows given the information.
Please show all work as I am unsure how to do this myself.
Thank you.
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