QUESTION $3(25$ MARKS$)$

Assume that we have the following data for five bonds, each of which matures at the

end of the stated period of time. For ease of exposition, we also assume that the

bonds pay coupons on an annual basis. The face value is RM$1,000$ for all the bonds.

Calculate the term structure using bootstrapping technique.

$3$

Maturity PV of Bond $($RM$)$ Coupon Rate $(\%)$

$19957\mathrm{.}25$

$29758\mathrm{.}25$

$39559\mathrm{.}25$

$49359\mathrm{.}85$

$588510\mathrm{.}50$

$(25$ marks$)$

PLEASE INCLUDE ALL WORKING STEPS IN CALCULATIONS AS THIS IS $25$ MARKS