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Question 7 (Total 20 marks) The following table gives the relevant information of four bonds. a) Calculate the zero rates for maturities of 6 months,

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Question 7 (Total 20 marks) The following table gives the relevant information of four bonds. a) Calculate the zero rates for maturities of 6 months, 12 months, 18 months, and 24 months. (7 marks) b) What are the forward rates for the 6 -month periods: months 7 to 12 , months 13 to 18 , months 19 to 24 ? (7 marks) c) Estimate the price and the yield of a two-year bond providing a semiannual coupon of 7% per annum. (6 marks)

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