Question

Suppose you observe the following (zero-coupon) yield curve. Calculate the discout curve (i.e. calculate the discount...

Suppose you observe the following (zero-coupon) yield curve.

Calculate the discout curve (i.e. calculate the discount factors Z(T) using the formula from class). Assume semi-annual compounding.

Hint: In class, we had to following formula for calculating discount factors Z(T) from zero-coupon rates r(T) in the case of semi-annual compounding

Calculate the discout curve (i.e. calculate the discount factors using the formula from class). Assume semi-annual compounding. Round to six digits after the decimal (e.g. 0.987654).

1) 0.5 years=?

2)1.0 years=?

3)1.5 years=?

4) 2.0 years=?

5)2.5 years=?

6) 3.0 years=?

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