Question 6. Suppose that the current spot rates for US treasuries are 1%, 1.2%, 1.5% and 2% for 1,2,3 and 4 year terms respectively (i) Give the formula for the current price of a 2 year zero coupon bond at this spot rate. (ii) Give the formula for, and evaluate, the forward rate for a three year bond in 1-year's time. (iii) State a no-arbitrage law and say what it tells you about the spot rate for Sg in terms of the value of $4. (iv) What is the formula for the least possible yield to maturity of a 5-year Treasury bond based on this data if an investor requires a positive yield to maturity? Question 6. Suppose that the current spot rates for US treasuries are 1%, 1.2%, 1.5% and 2% for 1,2,3 and 4 year terms respectively (i) Give the formula for the current price of a 2 year zero coupon bond at this spot rate. (ii) Give the formula for, and evaluate, the forward rate for a three year bond in 1-year's time. (iii) State a no-arbitrage law and say what it tells you about the spot rate for Sg in terms of the value of $4. (iv) What is the formula for the least possible yield to maturity of a 5-year Treasury bond based on this data if an investor requires a positive yield to maturity