Assume all coupon rates are paid semi-annually. Use face value of $100. Consider 6-month and 1-year forward rates of r(0.5)=5% and r(1)=6% Consider 18-month and 2-year spot rates of (1.5) = 5.3% and (2) = 6.7% The price of a zero-coupon bond maturing in 2.5 years from now is $85

a) Find the 1-year spot rate (1)

b)  Find the 18-month forward rate r(1.5)