Assume the spot rates for one-, two-, and three-year zero coupon bonds are 2%, 3%, and 4%.

(a)Calculate P(1), P(2), and P(3). Price of bonds assuming Face value 100

(b)Calculate the price of a three-year 8% coupon bond, with interest paid annually.

(c)Calculate 1,1, 1,2, and 2,1

(d)Calculate F(1,1), F(1,2), and F(2,1).

(e)If 1,3= 5%, calculate P(4)