Problem 8 (Bootstrapping). Suppose we see the following Treasury prices quotes: 3 Maturity in Years Coupon Bond Price N/A 2 1/4 2 1/4 2 1/2 2 7/8 0.50 $98.82 $99:21 1.00 $99:09 1.50 $99:05 2.00 $99:20 2.50 $99:17 3.00 3 1/8 3 1/2 $99:20 $100:19 3.50 4.00 Assume each bond has a face value of $100, coupons are paid semi-annually, and use semi-annual compounding. Tbill price quote is in decimals, while coupon bearing Treasuries are quoted using the market convention. Derive and plot the zero yield curve for the eight maturity points given in the table. Show all your work on the derivation Problem 8 (Bootstrapping). Suppose we see the following Treasury prices quotes: 3 Maturity in Years Coupon Bond Price N/A 2 1/4 2 1/4 2 1/2 2 7/8 0.50 $98.82 $99:21 1.00 $99:09 1.50 $99:05 2.00 $99:20 2.50 $99:17 3.00 3 1/8 3 1/2 $99:20 $100:19 3.50 4.00 Assume each bond has a face value of $100, coupons are paid semi-annually, and use semi-annual compounding. Tbill price quote is in decimals, while coupon bearing Treasuries are quoted using the market convention. Derive and plot the zero yield curve for the eight maturity points given in the table. Show all your work on the derivation