A three-year $1,000, 4%, par-value bond with annual coupons sells for $990, a two-year $1,000, 3% bond with annual coupons sells for $988, and a one-year, zero-coupon, $1,000 bond sells for $974.

Determine the spot rates r1, r2, r3.

Determine the implied forward rate f[0,1], f[1,2] and f[1,3].

Using the yield of the three-year bond at the purchase date, find the practical dirty value D prac 1.25 and the practical clean value

C prac 1.25 of the three-year bond after it was purchased for 1.25 years.