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The following information about bond prices is provided: (All bonds have a face value of $100. Coupon rates are expressed with semi-annual compounding) Required: (a)

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The following information about bond prices is provided: (All bonds have a face value of $100. Coupon rates are expressed with semi-annual compounding) Required: (a) Calculate the continuously compounded zero rates for the bonds above. Record your answer to 3 decimal places in percentage i.e. x.xxx% or 0.xxxxx. (4 marks) (b) What are the forward rates for the periods: 6 months to 12 months, 12 months to 18 months, 18 months to 24 months? Record your answer to 3 decimal places in percentage i.e. x.xxx% or 0.xxxxx. (4 marks) (c) Estimate the price of a two-year bond providing a semi-annual coupon of 7% per annum. (4 marks)

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