Assume that the government has issued three bonds. The first, which pays $1,000 one year from today, is now selling for 909.09. The second, which pays $100 one year from today. $100 one year later, and $1,100 one year later, is now selling for 991.81. The third, which pays $100 one year from today, $100 one year late , and $1,00 one year after that, is now selling for 997.18.

A. What are the current discount factors for dollars paid one, two and three years from today?

B. What are the forward rates?