Question 6 You observe the Treasury yield curve below (all yield are shown on a bond equivalent basis) Yield to Maturit 1 0.00% 9.75 9.50 9.25 Forward Rate Year 0.5 Spot Rate 1 0.00% 9.75 9.48 9.22 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 7.0 7.5 8.0 8.5 9.0 9.5 10.0 9.00 8.75 8.50 8.25 8.00 7.75 7.50 7.25 7.00 6.75 6.50 6.25 6.00 5.75 5.50 5.25 8.95 8.68 8.41 8.14 7.86 7.58 7.30 7.02 6.74 6.46 6.18 5.90 5.62 5.35 All the securities maturing from 1.5 years on are selling at par. The 0.5 year and one-year securities are zero-coupon instruments. a. Calculate the missing spot rates b. Calculate the missing forward rates c. What should the price of the four year Treasuring security be