Assume that there is a constant ideal bank which offers a yearly interest rate of 6% compounded monthly. Consider an annuity whose equal cash flows of size 100 are paid at the end of each month over a period of ten years. Compute the size of a single cash flow arising after five years that is equivalent to the annuity. Let s be the spot rate associated with maturity k, that is, the present value of one pound to be received after k years under yearly compounding. Show explicitly that if the spot rate curve is flat (with sk = r for all kE N), then all forward rates fkl, k