1.Consider the following spot rate curve:

• 6-month spot rate: 7%.
• 12-month spot rate: 11%.
• 18-month spot rate: 14%.

What is the forward rate for a 6-month zero coupon bond issued one year from today? Equivalently, the question asks for f₁², where 1 time period consists of 6 months. Remember, like spot rates, forward rates are expressed as bond-equivalent yields.

Round your answer to 4 decimal places. For example if your answer is 3.205%, then please write down 0.0321.

2. Consider the following spot rate curve:

• 6-month spot rate: 8%.
• 12-month spot rate: 10%.
• 18-month spot rate: 14%.

What is the forward rate for a one-year zero coupon bond issued 6 months from today? Equivalently, the question asks for f₂¹, where 1 time period consists of 6 months.

Assume semi-annual compounding. Round your answer to 4 decimal places. For example if your answer is 3.205%, then please write down 0.0321.

Assume semi-annual compounding. Round your answer to 4 decimal places. For example if your answer is 3.205%, then please write down 0.0321.