You have estimated spot rates as follows: r1=6.30%,r2=6.70%,r3=7.00%,r4=7.20%,r5=7.30%.

What are the discount factors for each date (i.e., the present value of $1 paid in year t)?

Calculate the PV of the following $1,000 bonds assuming annual coupons and maturity of:(1) 6.3%, two-year bond; (2) 6.3%, five-year bond; and (3) 11.3%, five-year bond.