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Problem 6 Betty and Bob must cons11'uct the ZCB yield curve for Freedonia. Freedonia has bonds of 6 months, 12 months, 18 months, and 24

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Problem 6 Betty and Bob must cons11'uct the ZCB yield curve for Freedonia. Freedonia has bonds of 6 months, 12 months, 18 months, and 24 months terms. A 6 month ZCB with maturity value of $100 is priced at $943396. A 1 year coupon bond with maturity value of $100 and a coupon rate of 8% per annum payable semiannually is priced at $94.6112. An 18 month coupon bond with maturity value of $100 and a coupon rate of 19% per annum payable semiannually is priced at $105.44031. A 2 year coupon bond with maturity value of $100 and a coupon rate of 10% per annum payable semiannually is priced at $902871. a By viewing the coupon bond as the sum of the ZCBs find the per annum yield compounded semiannually for the 6 months, 1 year, 18 months and 2 years ZCB. Graph this yield versus term. 1You may connect your points with line segments. 1; A special 2 year bond has maturity value of $100 and coupons of $4, $9, $5, and $7 in that order. Use the ZCB yield curve data to compute the price of the bond. E Find and write the equation of the price of the special bond in terms of the coupons, maturity value and semiannual yield to maturity, i. Use your calculator or Excel Solver or other technology to approximate this per annum yield to maturity

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