Currently studying about fixed income and the construction of the Spot yield curve, but I do not know whether my intuition is right.
Suppose we have a firm that has traded Bond for different maturities (1,2,..,T). The Par yield of each Bond equals it's yield to maturity. Given the par coupon rates, we can construct the Spot yield curve. For the bond with maturity of 1 year, we discount to get the 1 year discount factor $d(0,1)$
Since, we know the d(0,1), for the 2 year discount factor
Where $C(i)$ the Par coupon of the bond with maturity i years