A 6% Treasury bond is trading at $1,040 per $1,000 of face value. It will make a coupon payment (i.e., 6%*1000/2=$30) 90 days from now. The yield curve is flat at 5% over the next 120days (to say, risk--free interest will be constant at 5%). Assume that all interest rates are discrete. Also, use 360 day-year convention).

a. Forward price per $1,000 of face value for a 120-day forward contract?

b. After 30 days. The value of the bond is $1,060. Find the value of the forward contract on the bond to the long position.