Assume that the 1-year zero-coupon bond is sold at $89.78 andthe yields to maturity for the coupon bonds selling at marketprices equal to their face values are 11% and 13% for 1-year and1.5-year issues respectively. Coupons are paid every 6 months andface values are $100 for all the bonds.
(a) Calculate the spot rate curve (s0.5,s1, s1.5).
(Keep your answer in decimal format 4 decimal places, e.g.0.1234. Do not give in percent format e.g. 12.34%.)
    s0.5:    s1:     s1.5 :
(b) Compute the quasi-modified duration for each of these bonds.(Keep 2 decimal places, e.g. xx.12.)
    Zero-coupon bond:
11% coupon bond:Â Â
   13% coupon bond: Â
(c)Â Â Determine the current price of an 14% coupon bondwith face value $100 and 18 months to maturity. (Keep 2 decimalplaces, e.g. xx.12.)
