3) a) What is the relationship between forward rates and zero-coupon bonds? b) Knowing that a zero-coupon bond paying $100 in two years is trading at $87 and the forward rate (with continuous compounding) between two and three years is 7%. What is the fair value of a zero-coupon bond maturing in three years and paying $100 ? c) Suppose that you know P(0,1), P(0, 2) and P(0,3), the values of the zero coupon bonds expiring in 1, 2 and 3 years respectively. What is the swap rate for a swap that starts in 1 year and it pays fixed for floating for the two subsequent 1-year periods