1. Suppose today a one year ZCB is priced at 0.97, a two year ZCB is priced at 0.95 and a three year ZCB is priced at 0.92. What is the implied forward rate for a one year loan starting one year from now? What is the implied forward rate for a one year loan starting two years from now?

2. Suppose the same info as in question 1. Suppose you wanted to lend $1 at the end of year 1 for two years, so that the loan matured at the end of year 3. Describe how you would buy and sell the ZCBs to accomplish this goal, and the amount of money that you would collect when the loan matured.

Please answer question 2