2. Suppose that on February 15, 1994 a firm wants to enter into a forward contract to purchase 5-year Treasuries, with coupon rate 8%, in two years (semi-annual coupons). The bond will have 5 years maturity left at the time of the purchase. Semi-annually compounded yield curve on 2/15/1994: Date Yield 2/15/1995 2.56% 8/15/1995 3.18% 2/15/1996 3.40% 8/15/1996 3.62% 2/15/1997 3.82% 8/15/1997 3.92% 2/15/1998 4.06% 8/15/1998 4.13% 2/15/1999 4.27% 8/15/1999 4.45% 2/15/2000 4.60% 8/15/2000 4.71% 2/15/2001 4.92% 8/15/2001 4.98% 2/15/2002 5.02% a) Compute the forward price. b) What is the value of the contract at initiation?