A. Use all available Government bond data to construct and present a yield, spot, and forward curve at the end

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Part 2: (18 Marks)

  1. Use all available Government bond data to construct and present a yield, spot, and forward curve at the end of June 2022 and December 2022. Estimate the spot curve and forward curve for 5 years. Present and discuss your findings. (7 marks)
  2. Review the yield, spot, and forward curves' predictive ability with a comprehensive reference to the relevant academic literature. Discuss the curves you have estimated in Part 2 (A) regarding this literature. Consider the COVID-19 pandemic issue and other recent significant events. Does the June 2022 forward curve predict the six-month spot rates in December 2022? Comment and explain. (11 marks)

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