*** QUESTIONS 7-10 APPEAR BELOW: ANSWER ALL OF THESE QUESTIONS *** A one-year bond with a 4% annual coupon rate has a current market price of $99.00. A two year bond with 6.5% annual coupons has a market price of $102.50. A three-year bond with 4.5% annual coupons has a market price of $100.50. All bonds have a face value of $100. QUESTION Z Based on the bootstrapping technique and assuming annual compounding, the one-year spot rate is closest to: [Select] QUESTION 8 Based on the bootstrapping technique and assuming annual compounding, the two-year spot rate is closest to: Select ] QUESTION 9 Based on the bootstrapping technique and assuming annual compounding, the three-year spot rate is closest to: Select] QUESTION 10 Consider buying:(i) a two-year bond paying 6% annual coupons that trades and (ii) a three year bond paying 3% annual coupons. If both bonds have a face value of $100 and the total market value of these bonds is $202, then, based on the spot rates calculated in Questions 7, 8 and 9, this portfolio of bonds i [Select ] Underpriced and the investor should sell the portfolio of bonds and buy them back via appropriate strips in order to make an arbitrage Fairly priced Overnriced and the investor should huv the nortfolio of honds and sell the cashflows via the strin market in order to make an arbitrage