You observe the yield curve below for treasury securities (all yields are on a bond equivalent basis). All the securities maturing from 1.5 years on are trading at par. The 0.5- year and 1-year securities are zero-coupon instruments. Use^ in your answer for exponential power. 1. (18) Recalculate the 1.0 spot rate in the table above (i.e., prove it is 5.50). 2. (2) Name the yield curve. Table Year 3.0 Year 0.5 1.0 1.5 2.0 2.5 Yield to Maturity 5.25% 5.50 5.75 6.00 6.25 Spot Rate 5.25% 5.50 5.76 6.02 6.28 3.5 4.0 4.5 Yield to Maturity 6.50 6.75 7.00 7.25 7.50 Spot Rate 6.55 6.82 7.10 7.38 7.67 5.0 You observe the yield curve below for treasury securities (all yields are on a bond equivalent basis). All the securities maturing from 1.5 years on are trading at par. The 0.5- year and 1-year securities are zero-coupon instruments. Use^ in your answer for exponential power. 1. (18) Recalculate the 1.0 spot rate in the table above (i.e., prove it is 5.50). 2. (2) Name the yield curve. Table Year 3.0 Year 0.5 1.0 1.5 2.0 2.5 Yield to Maturity 5.25% 5.50 5.75 6.00 6.25 Spot Rate 5.25% 5.50 5.76 6.02 6.28 3.5 4.0 4.5 Yield to Maturity 6.50 6.75 7.00 7.25 7.50 Spot Rate 6.55 6.82 7.10 7.38 7.67 5.0