Problem 1.2. The following table gives the prices of Treasury bonds: 0.5 Bond Principal ($) Time to Maturity (years) Annual Coupon Rate (%)* 100 0 1000 1 0 100 1.5 6 100 2 4 Bond Price ($) 98 960 102 98 *Half the stated coupon is paid every six months (a) Calculate zero rates for maturities of 6 months, 12 months, 18 months, and 24 months. (b) What are the forward rates for the periods: 6 months to 12 months, 12 months to 18 months, 18 months to 24 months? (c) What are the 6-month, 12-month, 18-month, and 24-month par yields for bonds that provide semiannual coupon payments? (d) Estimate the price and yield of a two-year bond providing a semiannual coupon of 2% per annum. Problem 1.2. The following table gives the prices of Treasury bonds: 0.5 Bond Principal ($) Time to Maturity (years) Annual Coupon Rate (%)* 100 0 1000 1 0 100 1.5 6 100 2 4 Bond Price ($) 98 960 102 98 *Half the stated coupon is paid every six months (a) Calculate zero rates for maturities of 6 months, 12 months, 18 months, and 24 months. (b) What are the forward rates for the periods: 6 months to 12 months, 12 months to 18 months, 18 months to 24 months? (c) What are the 6-month, 12-month, 18-month, and 24-month par yields for bonds that provide semiannual coupon payments? (d) Estimate the price and yield of a two-year bond providing a semiannual coupon of 2% per annum