A bond is issued at time t = 0 at a price of $107.60 per $100 nominal. The bond pays coupons of 6% p.a., annually in arrears, and will be redeemed at par in 3 years' time. The 2-year par yield at time t = 0) is 6.5% p.a. The 1-year forward rate of interest at time t = 1 year is 4.5% p.a. effective. [7 Calculate, showing all working and assuming no arbitrage, the implied 1-year, 2-year and 3-year annual effective spot rates