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The following bonds are traded in the economy Bond A: a 3-year coupon bond with face value of $1000 and annual coupon rate of 9.5%,

The following bonds are traded in the economy

  • Bond A: a 3-year coupon bond with face value of $1000 and annual coupon rate of 9.5%, currently traded at $1064
  • Bond B: a 3-year coupon bond with face value of $1000 and annual coupon rate of 15%, currently traded at $1211.36
  • Bond C: a 2-year coupon bond with face value of $1000 and annual coupon rate of 25%, currently traded at $1371.03

Determine the spot rates r1, r2, and r3

  • The 1year spot rate r1 is ____%
  • The 2year spot rate r2 is ____%
  • The 3year spot rate r3 is ____%

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