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Suppose 6-month Treasury bills are trading at a YTM of 2%, 12-month T-bills are trading at a YTM of 2%. If 18-month Treasury notes with

Suppose 6-month Treasury bills are trading at a YTM of 2%, 12-month T-bills are trading at a YTM of 2%. If 18-month Treasury notes with a coupon rate of 7% are trading at par ($100), then what is the 18-month spot rate?

Assume semi-annual compounding.

Round your answer to 4 decimal places. For example if your answer is 3.205%, then please write down 0.0321.

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