Use the following information for questions 1-7: The coupon payments for the following bonds are paid semi-annually: Bond 1: Par= $100, Annual Coupon Rate = 0, Maturity= 0.5 yrs, Market Price=98 Bond 2: Par= $100, Annual Coupon Rate Price-98.8 4. Maturity= 1.0 yr, Market Bond 3: Par= $100, Annual Coupon Rate = 6.2, Maturity- 1.5 yrs, Market Price-101 Question 1 1 pts The continuously compounded zero rate for 6 months is: O (a) 4.041% O (b) 4.062% O (c) 5.19% 0 (d) 5.44% 0 (e) 5.58% Question 2 1 pts The continuously compounded zero rate for 12 months is: (a) 4.041% O (b) 4.062% O (c) 5.19% (d) 5.4496 0 (e) 5.58% Question 3 1 pts The continuously compounded zero rate for 18 months is: (a) 4.041% b) 4.062% O c5.19% 0 (a) 5.44% (c) 5.58% Question 4 1 The 12-month par yield for bonds that pay semi-annual coupon payments i 0 (a) 4.081% O (b) 5.12% O (c) 5.24% 0 (d) 5.351% 0 (e) 5.497% Question 5 1 pt: The 18-month par yield for bonds that pay semi-annual coupon payments is: (a) 4.081% (b) 5.12% O (c) 5.24% 0 (d) 5.351% (e) 5.497% Question 6 1 pts A test bond with par value = 100, annual coupon rate - 4.8% (paid semi- annually), maturity = one year, and market price = $100.50 is: O (a) Overpriced by $0.93 O (b) Overpriced by $0.07 O (c) Underpriced by $0.93 O (d) Underpriced by $0.07 (e) None of the above Question 7 1 pts The arbitrage strategy for each unit of the test bond traded, is to o (a) Long 0.0039 units of bond 1 and Long 1.0039 units of bond 2 0 (b) Long 0.0024 units of bond 1 and Long 1.0024 units of bond 2 (c) Long 1.0078 units of bond 2 D (d) Long 1.0048 units of bond 2 De None of the above