QUESTION 4 a) A four-year annual coupon RM1,000 par bond has a coupon rate of 3%. Its payments are: HAKCIPTA TERPELIHARA USIM 2 smnzozamzl 21A The spot rates for this bond are given as follows: Term Spot Rate 1 2.00% 2 3.00% 3 3.05% 4 4.10% Using the spot rates as given above, i) Estimate the price of the bond (3 Marks] ii) Calculate the yield to maturity (2 Marks) b} The following are prices for 1, 2, 3 and 4 year bonds. All of the bonds have a face amount (and maturity value) of RM100 and pay 4% annual coupons. Term Bond Price 1 101.50 2 101.00 3 99.70 4 99.00 Find: i) spot rates for 12,3 and 4 years (12 Marks) ii} the yield to maturity for a 4-year term bond (2 Marks] [Total: 19 Marks]