1. What is the future value of a 10-year annuity that will pay you $3,000 per year if interest rates are 12%?

Round your answer to 2 decimal places, for example 100.12.

2. You observe that the return on a 2-year Treasury bond is 4.9% and the return on a 3-year Treasury Bond is 7.4%.

What is the one-year forward rate 2 years from now?

Enter your answer in decimals (not percent) and round to 4 decimal places, for example 0.1234.

3. You observe the following rates: a one-year Treasury has a rate of 7.0%, a 2-year Treasury has a rate of 15.7%. You read in the Wall Street Journal that all investors agree that the one-year rate next year will be 17.8%.

Given this information, calculate the liquidity premium for year 2.

Enter your answer in decimals (not percent) and round to 4 decimal places, for example 0.1234.