Question 3. Suppose the current 5-year spot rate for US treasuries is 2% (APR). (i) Give the formula for the price of a zero coupon bond that matures in 5 years time. (ii) Suppose that a US bond pays $10 in interest each 6 months and matures in 5 years time. Write the formula for the price of this bond. (iii) Is the price of the bond in (b) higher than, equal to, or lower than, the price of the zero coupon bond from part (a)? (Circle one). (iv) Given this 5-year spot rate, is the cost of a $1000 bond in (ii) higher, equal to, or lower than $1000? (Circle one). (v) If a US Treasury zero coupon bond that matures in 3 years time is priced at $95 what is the formula for the 3 year continuous spot rate? Question 3. Suppose the current 5-year spot rate for US treasuries is 2% (APR). (i) Give the formula for the price of a zero coupon bond that matures in 5 years time. (ii) Suppose that a US bond pays $10 in interest each 6 months and matures in 5 years time. Write the formula for the price of this bond. (iii) Is the price of the bond in (b) higher than, equal to, or lower than, the price of the zero coupon bond from part (a)? (Circle one). (iv) Given this 5-year spot rate, is the cost of a $1000 bond in (ii) higher, equal to, or lower than $1000? (Circle one). (v) If a US Treasury zero coupon bond that matures in 3 years time is priced at $95 what is the formula for the 3 year continuous spot rate