3. Assume the following Treasury spot rates: Period 1 2 3 4. 5 6 7 Years to maturity 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 Spot rate 5.0% 5.4 5.8 6.4 7.0 7.2 7.4 7.8 What is the one year (annualized) forward rate one year from now, f2,1? b. What is the two year (annualized) forward rate one year from now, f2,2? Plot the forward curve based on these two forward rates. (Hint: The spot rates are annualized rates on semi-annual basis) 3. Assume the following Treasury spot rates: Period 1 2 3 4. 5 6 7 Years to maturity 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 Spot rate 5.0% 5.4 5.8 6.4 7.0 7.2 7.4 7.8 What is the one year (annualized) forward rate one year from now, f2,1? b. What is the two year (annualized) forward rate one year from now, f2,2? Plot the forward curve based on these two forward rates. (Hint: The spot rates are annualized rates on semi-annual basis)