Question3 (a) Calculate the 2-year spot rate implied by the US Treasury yield curve data based on two zero coupon US Treasury bonds of 1 and 2 years maturity, both priced at par, as shown below. Assume interest is paid semi-annually for purposes of this calculation. Show all calculations. Years to Current Coupon Spot Maturity 7.5% 8.0% Rate 7.5% ?2 (5 marks) (b) Discuss why a spot-rate curve can be derived entirely from the current-coupon (yield-to-maturity) yield curve. (5 marks) (c) Given a US Treasury 1-year spot rate of 9% and US Treasury 2-year spot rate of 9.5%, compute the implied 1-year forward rate for the 2-year US Treasury security with 1 year remaining to maturity. (Assume semi-annual interest payment.) (5 marks) (d) Discuss why a 1-year forward rate of 9.6% would not be expected to prevail in a market given those spot rates in Question 3(c) above