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Can you share the solution of this
Please share its solution because when slope of spread is 0.15 than how come they are taking spread of 5 year AAA bond as 0.6 (0.15*4).
Rather it should be 2.1 as slope is (0.15*4)+1.5 or 2.85-(0.15*5).
And your yield should be 3.75+2.1=5.85.
But they have just multiply the slope with 4 and considered it as spread.
How come 1 year spread is 1.5 and 5 year spread is 0.6??
Question seems to be confusing. Please share the solution.