2. YTM of 2Y zero coupon bond is 10%, YTM of 1Y zero coupon bond is 8% What is forward rate F 1,1 (one year interest rate after one year)? 8% a. b. 10% 9% c. d7% 12% 3. We have two six-year investment projects (data in the table). The discount rate is equal to 10.0% p.a. and the reinvestment rate is equal to 5.0% pa. Alfa Beta -500 -600 200 420 (in thousands of PLN) Initial expenditure Cash flow (first year) Cash flow (second year) Cash flow (fourth year) Cash flow (sixth year) 120 200 200 120 200 420 Calculate: a) the net present value, (PLN 94 605 vs PLN 200 032) b) the profitability index, (1.193 vs 1.333) c) the payback period, (2.5 vs 2.5) d) which project should a company choose. (Beta)