You have a gathered data on a series of ten different $1,000 par value Treasury bonds maturing at different times.All of these bonds pay interest semiannually, and all of them have the same annual coupon rate of 8% (i.e., bonds pay $40 in interest twice per year).Using information below on the price and maturity of each bond, calculate each bond's ytm and calculate the spot interest rate for each maturity date.As before, use the (1+r/2) convention when dealing with semiannual interest payments (i.e., refer to either Equation 1 or Equation 2 in my "Notes for Week 2" file, depending on whether you are solving for a ytm or a spot rate).When you report your answers, you should always report interest rates as annual rates.For example, because the first bond sells at par, its coupon rate and its ytm should be the same, 8%.Hint: To find spot rates, you have to start with the first bond and then work iteratively through the others, using your answers for the prior bonds to find more and more distant spot rates.

MaturityBond priceYTMSpot rate

6-mo$1,000.00

12-mo$ 997.69

18-mo$ 995.52

24-mo$ 991.25

30-mo$ 984.17

36-mo$ 975.51

42-mo$ 965.47

48-mo$ 958.91

54-mo$ 949.47

60-mo$ 929.35

What is the general relationship that you observe between YTMs and spot rates?

What is the forward interest rate from month 24 to month 42?