Maturity	Spot rate
6 months	7.60%
1 year	8.12%
1 year and 6 months	9.00%
2 years	9.50%

Based on the first two spot rates, we had calculated that the 6-month rate six months from now is expected to be 8.64%.

1. What 1-year rate do you expect to see six months from now?

2. You purchase a bond that matures in a year and a half, and has a coupon rate of 10% (paid semi-annually).

- What is your expected return from this bond if your holding period is 6 months?

- What is your expected return from this bond if your holding period is 1 year?