Section A Zuestion 1 The following table reflects riskless bond prices, coupon rates, and terms to maturity for a given economy: Assume the bonds make annual coupon payments at year-end. The tabulated data can be used in parts (a), (b), and (c) of this question. a) Explaining the method, calculate the spot rates for years one through four and the two-year forward rate for a loan originated in one year. ( 25 marks) b) Consider an additional bond X with a coupon rate of 15% and a maturity of two years. Bond X 's face value is also $1,000. The current market price of bond X is $1,055. Explaining the method, find a portfolio of the bonds A,B,C, and D that would replicate the cash flow structure of bond X. (25 marks) c) A pension fund expects to make payments of $80,000,000 in one year, $100,000,000 in two years, $120,000,000 in three years, and $140,000,000 in four years to shareholders of the fund. These anticipated cash flows are to be matched with a portfolio of the bonds A, B, C, and D. How many of each of the four bonds should the fund purchase to exactly match its anticipated payments to shareholders? Explain. (25 marks)- d) Discuss the currency swap valuation process - using the bond valuation approach and viewing the