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6. The following are the prices for zero-coupon bonds with par value of $1,000, maturing at par: Term In Years Price 1 $943.40 2 898.47

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6. The following are the prices for zero-coupon bonds with par value of $1,000, maturing at par: Term In Years Price 1 $943.40 2 898.47 3 847.62 792.16 Determine the one-year forward rate for year 3 (i.e., the one-year effective rate during year 3). Select one: a. 7.00% b. 5.00% c. 3.85% d. 4.25% e. 6.00%

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