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2. (3pts) A one-year zero-coupon $1000 bond sells for $970, a two-year $1000 bond with 3% annual coupons sells for $980, and a three-year $1000

2. (3pts) A one-year zero-coupon $1000 bond sells for $970, a two-year $1000 bond with 3% annual coupons sells for $980, and a three-year $1000 bond with 4% annual coupons sells for $990. Determine all spot rates and all forward rates in the three years.

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