In: Finance
You have estimated spot rates as follows:
r_{1}= 6.40%, r_{2}= 6.80%, r_{3}= 7.10%, r_{4}= 7.30%, r_{5}= 7.40%.
a. What are the discount factors for each date (that is, the present value of $1 paid in year t)? (Do not round intermediate calculations. Round your answers to 3 decimal places.)
year  Discount Factor 
1  
2  
3  
4  
5 
b. Calculate the PV of the following $1,000 bonds assuming an annual coupon and maturity of : (i) 6.4%, twoyear bond; (ii) 6.4%, fiveyear bond; and (iii) 11.4%, fiveyear bond. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
i  6.4% twoyear bond 

Ii  6.4%fiveyear bond  
iii  11.4%five year bond  